Cambridge Handbook of Organizational

Project Management
In recent years, organizational project management
(OPM) has emerged as a field focused on how project,
program, and portfolio management practices
strategically help firms realize organizational goals.
There is a compelling need to address the totality of
project-related work at the organizational level,
providing a view of organizations as a network of
projects to be coordinated among themselves,
integrated by the more permanent organization, and to
move away from a focus on individual projects. This
comprehensive volume provides views from a wide
range of international scholars researching OPM at
a cross-disciplinary level. It covers concepts, theories,
and practices from disciplines allied to management,
such as strategic management, organization science,
and behavioral science. It will be a valuable read for
scholars and practitioners alike, looking to enrich their
understanding of OPM and further investigate this new
phenomenon.

shankar sankaran is Professor of Organisational

Project Management (OPM) in Australia at the
University of Technology Sydney.

ralf müller is Professor of Project Management in

BI Norwegian Business School in Oslo and a former
Associate Dean at the Business School.

nathalie drouin is the Executive Director of

KHEOPS, an International Research Consortium on
Large Infrastructure Projects, the Editor-in-Chief of
the International Journal of Managing Projects in
Business, a full professor, Department of Management
and Technology, School of Management at Université
du Québec at Montreal (ESG UQAM), and Adjunct
Professor (Honorary Appointment) at University of
Technology Sydney, Australia.

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 Cambridge
Handbook of
Organizational
Project
Management
Edited by

SHANKAR SANKARAN
University of Technology Sydney
RALF MÜLLER
BI Norwegian Business School

NATHALIE DROUIN
Executive Director of KHEOPS

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DOI: 10.1017/9781316662243
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 Contents

List of Figures viii

List of Tables x
List of Contributors xi
Foreword Jörg Sydow xvii

Introduction 1
Shankar Sankaran, Ralf Müller,
and Nathalie Drouin

PART I STRATEGY 5
Introduction to Part I 7
Nathalie Drouin
1 The Nature of Organizational Project Management
through the Lens of Integration 9
Nathalie Drouin, Ralf Müller, and Shankar
Sankaran
2 The Business of Projects in and across
Organizations 19
Miia Martinsuo, Rami Sariola, and Lauri
Vuorinen
3 Strategic OPM 33
Why Companies Need to Adopt a Strategic
Approach to Project Management
Vered Holzmann, Aaron Shenhar, and Joca
Stefanovic
4 Strengthening the Connections between Strategy
and Organizational Project Management 44
Kam Jugdev
5 Project Portfolio Management 55
A Dynamic Capability and Strategic Asset
Catherine P. Killen and Nathalie Drouin

PART II ORGANIZATIONS 71
Introduction to Part II 73
Ralf Müller

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 vi Contents

6 The Governance of Organizational Project

Management 75
Rodney Turner and Ralf Müller
7 Project Portfolio Management 92
The Linchpin in Strategy Processes
Julian Kopmann, Alexander Kock, and
Catherine P. Killen
8 Program Management 106
Peerasit Patanakul and Jeffrey K. Pinto
9 Organizing for the Management of
Projects 119
The Project Management Office in the Dynamics of
Organizational Design
Monique Aubry and Mélanie Lavoie-Tremblay
10 Project Governance and Risk Management 134
From First-Order Economizing to Second-Order
Complexity
Stephane Tywoniak and Christophe Bredillet

PART III PEOPLE 149

Introduction to Part III 151
Shankar Sankaran
11 Human Resource Management in Organizational
Project Management 153
Current Trends and Future Prospects
Anne Keegan, Martina Huemann, and
Claudia Ringhofer
12 Stakeholders 172
Pernille Eskerod
13 Balanced Leadership 186
A New Perspective for Leadership in
Organizational Project Management
Ralf Müller, Johann Packendorff, and
Shankar Sankaran
14 Project Teams and Their Role in Organizational
Project Management 200
Nathalie Drouin and Shankar Sankaran
15 REAL Knowledge at NASA 215
A Knowledge Services Model for the Modern
Project Environment
Ed Hoffman and Jon Boyle

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 Contents vii

16 Change Management as an Organizational and

Project Capability 236
Julien Pollack
17 The Behavioral “Glue” in OPM 250
A Review of Productive Behaviors of Project Team
Members
Timo Braun
18 Developing Organizational Project Management
Competencies through Industry Clusters 268
Chivonne Algeo and Julia Connell

PART IV NEW DIRECTIONS 281

Introduction to Part IV 283
Shankar Sankaran
19 Ethics in Projects 285
Øyvind Kvalnes
20 Multilevel Value Creation in Projects, Programs,
and Portfolios 295
Results from Two Case Studies
Karyne Ang and Christopher Biesenthal
21 An Inherent Complexity 311
Projects and Organizations
Kaye Remington
22 Organizational Project Management and
Sustainable Development (SD) 326
Managing the Interface of Organization and Project
SD Benefits
Lynn A. Keeys and Martina Huemann
23 The Marketing of Organizational Project
Management 344
Rodney Turner and Laurence Lecoeuvre
24 Shared Space for Organizations 357
Enablers for Innovative Projects
Kim van Oorschot
25 Social Media and Project Management 370
Symbolism in Action
Hélène Delerue and Tom Cronje
Conclusions 383
Ralf Müller, Shankar Sankaran, and
Nathalie Drouin

Index 386

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 Figures

1.1 OPM and its lens of integration. 13 7.2 A project portfolio perspective of
2.1 Summary of key business decisions at the planned and emergent strategic
front end of the project. 21 elements. 94
2.2 Illustration of the research setting in the 7.3 Cascade model. Extended from Morris &
construction project networks. 21 Jamieson, 2005. 94
2.3 Business issues in project control at the 8.1 A possible management setting in
different levels of the PBO. 25 an organization. The effectiveness in
2.4 Summary of key business decision issues in managing a group pf multiple projects:
the postproject phase. 25 Factors of influence and measurement
2.5 Summary of business decisions over the criteria. 108
project life cycle. 29 9.1 Theoretical background within a process
3.1 Strategic project management approach. 123
maturity. 34 9.2 Case A: Organizational design. 125
3.2 Strategic vs. operational goal 9.3 Case B: Organizational design. 126
projects. 35 9.4 Case C: Organizational design. 126
3.3 Organizational demographics. 37 10.1 First-order v. second-order risk
3.4 SPMM dimensions’ means. 38 approaches. 141
3.5 Maturity dimensions and their impact on 10.2 The Norwegian State Project
project strategic value. 39 Model – Stage Gate Approval
4.1 The strategic management process. 46 process. 142
6.1 Three organizations involved in the 13.1 Leading and leadership, vertically and
management of projects. 76 horizontally. 193
6.2 Three levels of results on projects. 76 15.1 Knowledge services strategic
6.3 Three portfolios of which the project is framework. 220
a part. 76 15.2 NASA Knowledge Map and
6.4 The investment portfolio of the investor legend. 221
organization. 77 15.3 NASA REAL Knowledge model. 225
6.5 Four roles in the governance of 15.4 The 4A Word Cloud. 228
projects. 81 15.5 NASA Knowledge Referee
6.6 Four governance structures for process. 231
projects. 84 16.1 Models of the relationship between
6.7 The cascade from corporate strategy to project management and change
project strategy 85 management. 245
7.1 The relationship between intended and 17.1 Within- and between-project
realized strategy (based on Mintzberg & cross-fertilization. 262
Waters, 1985). 93 17.2 Interdisciplinary cross-fertilization. 263

viii

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 List of Figures ix

19.1 The Navigation Wheel. 288 23.4 A stakeholder engagement process. 350
22.1 Illustrative hierarchy of projects as system 23.5 A model for emotional intelligence. 351
actors within SD system. 329 23.6 Four phases of project marketing. 353
22.2 Individual project SD system actor. 330 23.7 Three customers for the contractor’s account
22.3 SD-OPM benefits keystone. 333 team. 354
22.4 SD benefits cocreation process. 337 24.1 Intended and unintended effect of
23.1 Three organizations involved segregation in traffic and the shared space
in the management of projects. 345 solution. 360
23.2 The project process and three levels of 25.1 The dynamic development process for the
project results. 346 use of social media by project teams. 378
23.3 The project management process. 350

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 Tables

3.1 Correlations of Maturity with Success 17.1 Publications with a Focus on Productive
Dimensions 39 Behavior in Projects, 2006–2016 252
3.2 The Evolution of OPM from Traditional 17.2 Reviewed Studies on Sharing
PM to Strategic PM 41 Behavior 254
9.1 Description of the Cases 125 17.3 Reviewed Studies on Extra-Productive and
9.2 Projects Portfolio/Case 127 Improvising Behaviors 257
9.3 Trajectory of the PMO 128 17.4 Antecedences of Productive
11.1 Challenges and Potentials of Project Behavior 260
Work 155 17.5 Consequences of Productive
11.2 Summary of HRM Processes Behavior 261
Practices on Projects Identified in the 18.1 Details of PM Competencies 270
Literature 157 20.1 Reference to Organizations, Interviewee
11.3 Summary of HRM Practices and Processes Codenames, and Roles 298
Linking the Project and the Project-Based 22.1 Project-Oriented Culture 331
Organization 160 22.2 SD, OPM, and Project
12.1 Contrasting a Project-Centric Approach Compatibility 333
and a Stakeholder-Centric 23.1 Stakeholders in the Investment, and Their
Approach 182 First Engagement 347
14.1 Review of Literature on Themes on Project 23.2 A Model for Emotional
Teams 205 Intelligence 351

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 Contributors
Shankar Sankaran is Professor of Organisational
Project Management at the Faculty of Design
Architecture and Building at the University of
Technology Sydney (UTS), Australia, and Core
Member of the Built Environment Informatics and
Innovation Research Centre and a Chief
Investigator of the UTS Centre for Research on
Megaprojects. He is an investigator in a PMI
Sponsored Research Grant on project leadership led
by Ralf Müller and a principal investigator in the
PMI Sponsored Research Grant on Governance of
Innovation in Portfolios, Programs and Projects
(3P). Shankar teaches Organizational Project
Management in the Master of Project Management
Program at UTS. He has supervised over thirty
doctoral students, worked as a chief investigator in
two Australian Research Council funded research
grants, published/presented over one hundred
research papers, served as special issues editor in
leading project management journals, edited three
books, and contributed over fifteen book chapters.
He is on the editorial board of the International
Journal of Project Management. Shankar joined
academia after several years of experience as
a major project manager and senior operations
manager in Yokogawa Electric Asia, Singapore.
Shankar is the secretary of and a subject matter
expert in Work Group 8 of the ISO TC 258
developing standards in the field of project,
program, and portfolio management.
Ralf Müller is Professor of Project Management
and former Associate Dean at BI Norwegian
Business School as well as adjunct and visiting
professor at many other institutions worldwide. He
lectures and researches in leadership, governance,
organizational project management, and research
methods, which is the subject of his more than 200
academic publications. Among the awards he
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received are the 2016 PMI Fellow of the Institute
Award, the 2015 PMI Research Achievement
Award (a lifetime achievement award), the 2012
IPMA Research Award, and the 2009 Project
Management Journal Best Paper of the Year Award.
He is Senior Editor of the Project Management
Journal and founder of the first PMI Chapter in
Europe. Before joining academia, he spent thirty
years in the industry consulting with large
enterprises and governments in more than fifty
different countries for their project management and
governance. He also held related line management
positions, such as the Worldwide Director of Project
Management at NCR Corporation.
Nathalie Drouin is Executive Director of
KHEOPS, an International Research Consortium on
the Governance of Large Infrastructure Projects, the
Editor-in-Chief of the International Journal of
Managing Projects in Business, Full Professor,
Department of Management and Technology,
School of Management at Université du Québec at
Montreal (ESG UQAM) and Adjunct Professor of
the University of Technology Sydney, Australia.
She was formerly an Associate Dean, Research at
ESG UQAM, and Director of the Graduate Project
Management Programs, ESG UQAM. She teaches
initiation and strategic management of projects in
the Graduate Project Management Programs. Her
research has been funded by various research
councils. The result of her work has been published
in major academic journals and presented at several
international conferences. Her work on virtual
project teams’ success and organizational
capabilities within project context and project
management research methods led to the
publication of the first book on methods for project
management research, Novel Approaches to Project
Management Research: Translational and
xi
 xii List of Contributors
Transformational, coedited with Ralf Müller and
Shankar Sankaran. She is a member of the PMI
Academic Member Advisory Group, the Board of
Directors of the Logistics and Transportation
Metropolitan Cluster of Montreal (CARGO M), and
the Board of Directors of KHEOPS, an International
Research Consortium on the Governance of Large
Infrastructure Projects.
Chivonne Algeo is Associate Professor of Project
Management at Monash University and researches
on knowledge exchange in projects. She has won
international awards for her research, and has
twenty years of experience delivering international
projects. Chivonne is the chair of the ANZAM
Project Organising SIG; a member of PMI; and
a Life Fellow of the AIPM.
Karyne Ang is affiliated with the University of
Technology Sydney (UTS), Australia. Her research
into multiple stakeholder perspectives of value in
project portfolios could contribute to opportunities
for optimizing relevant value constructs for
decision-making that are aligned with the
organization’s and stakeholders’ strategic intents.
Monique Aubry is a professor at the School of
Management, UQAM. Her main research interest
concerns organizing for projects and organizational
design. She is a member of the Project Management
Research Chair (www.pmchair.uqam.ca) and the
UQAM’s Health and Society Institute. She is Senior
Editor at the Project Management Journal.
Christopher Biesenthal is a senior lecturer at the
University of Technology Sydney. His main
research area is project governance. Project
governance is primarily concerned with the
alignment of different organizational directions.
This fuzzy intersection where strategy and project
management meet provides grounds to investigate
the nature of organizational practices.
Jon Boyle is NASA Agency Deputy Chief
Knowledge Officer, where he contributes to the
development of the overall NASA Technical
Workforce. He possesses expertise in Cognitive
Neurosciences, Industrial/Organizational
Psychology, Knowledge Management, Group
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Processes, Human Resources and Workforce
Development, Business Strategy, Technology-
Enabled Learning, Research and Development, and
Process Improvement.
Timo Braun is Junior Professor for Project
Management at the Freie Universität Berlin in
Germany. He has published on cooperative human
behavior in projects and interorganizational
networks as well as on cross-organizational
perspectives on entrepreneurial processes. His PhD
project was honored by the IPMA Germany award
for the best doctoral thesis in 2013.
Christophe Bredillet is Professor of
Organizational Project Management at Université
du Québec à Trois-Rivières (UQTR). He is director
of the Doctoral program in business administration.
His main interests are in Philosophy of Science and
Practice and complex/organizational project
management. He received the IPMA Research
Achievement Award 2016.
Julia Connell is an Adjunct Professor of
Management, Curtin University and an honorary
fellow at the University of Technology, Sydney
(UTS). She has published widely on topics related
to employment, change and organizational
effectiveness as well as consulting to a number of
public and private sector organizations on related
topics.
Tom Cronje has an academic career that consists of
lecturing and research in different business
management areas, which include collaborative
research on social media. He also has industry
experience in manufacturing and retail business
management, including the development and
launching of new products.
Hélène Delerue is Project Management Research
Chair (www.pmchair.uqam.ca) at UQAM, and
holds a PhD in Management (Paris-Dauphine). She
is a Full Professor at the Management and
Technology Department at Université du Québec à
Montréal (ESG UQAM). Her current work focuses
on relational risk management in alliance
relationships, R&D processes, and R&D project
portfolio management.

Pernille Eskerod is Full Professor at the Department
of Business and Management, Webster Vienna
Private University, Austria. She conducts research
within change management and project
management. She has authored more than one
hundred publications, including the book RETHINK!
Project Stakeholder Management (2016, with
Martina Huemann & Claudia Ringhofer), based on
a competitive PMI research grant.
Ed Hoffman was the first NASA Chief Knowledge
Officer (CKO) in 2011. He focuses on the policies,
strategies, processes, and practices for promoting
a successful knowledge creation, retention, and
sharing culture in support of mission success. He
also works with industry, academia, professional
associations, and government agencies to develop
the agency’s capabilities in program and project
management.
Vered Holzmann is a lecturer in the Faculty of
Management, Tel-Aviv University, and researches
the topics of innovation and entrepreneurship,
project management and strategy. She manages
international projects in the fields of higher
education, information systems and software
development and served as VP for research and
academic affairs in PMI Israel Chapter.
Martina Huemann is a professor at the WU
Vienna University of Economics and Business,
where she heads the Project Management Group in
the Department Strategy & Innovation and is the
Academic Director of the Professional MBA
Program: Project Management. She is cofounder
and manager of enable2change, a network of
independent experts who translate strategy into
action.
Kam Jugdev is a Professor of Project Management
and Strategy in the Faculty of Business at Athabasca
University, Alberta, Canada. Kam enjoys teaching
students in project management and strategy. Her
research spans competitive advantage, lessons
learned, burnout, the free rider phenomenon, and
project success/failure.
Anne Keegan is Professor of Human Resource
Management at UCD School of Business, Ireland.
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List of Contributors xiii
She carries out research on HRM and leadership in
a project-based organizational context and has
published in leading HRM, general management,
and project management journals.
Lynn Keeys is a visiting research fellow at the
Project Management Group, WU Vienna University
of Economics and Business and part-time faculty,
Boston University Metropolitan College Master’s
program in project management. Her interests
include the link between organization, program and
project strategy, benefits cocreation, and sustainable
development as holistic management.
Catherine P. Killen is an Associate Professor and
the director of the postgraduate project management
program in the Faculty of Design, Architecture and
Building at the University of Technology Sydney.
Catherine’s research focuses on project portfolio
management, primarily from a practice-based
perspective. She has more than sixty refereed
publications in this area.
Alexander Kock is Professor of Technology and
Innovation Management at the Technische
Universität Darmstadt, Germany. His research
interests cover project portfolio management,
highly innovative projects, the early phases of the
innovation process, and university-industry
collaboration. He has published over twenty-five
journal articles and a widely used textbook on
innovation management.
Julian Kopmann (PMP) is an expert in project and
project portfolio management solutions at
Bombardier Transportation. During his PhD studies
on value realization through project portfolio
management he was in charge of the 6th
Multiproject Management Benchmarking Study of
the Technische Universität Berlin, Germany.
Øyvind Kvalnes is a philosopher with a PhD in
Ethics from the University of Oslo. He is an
associate professor at BI Norwegian Business
School, Department of Leadership and
Organizational Behaviour.
Mélanie Lavoie-Tremblay is an associate
professor at the Ingram School of Nursing, McGill
 xiv List of Contributors
University. She is conducting research to improve
organization of care and work for personnel,
patients, and the organization. She is a researcher at
the Centre de recherche de l’Institut universitaire en
santé mentale de Montréal.
Laurence Lecoeuvre is Professor and Deputy
Director of Masters in Management Program at
Université Côte d’Azur, SKEMA, France. Until
2015 she was an Associate Dean of Doctoral
Programs and Head of the Department of
Management of Projects at SKEMA’s Lille campus.
She has twenty years of industry experience as an
International Marketing Director.
Miia Martinsuo is Professor of Industrial
Management at the Laboratory of Industrial and
Information Management, Tampere University of
Technology, Finland. Her field of research and
teaching is industrial operations, particularly in
project and service business. Her research interests
include: project organizing and lifecycle
management; managing project portfolios; the
autonomy of development projects; and
transformation toward service business.
Johann Packendorff is Professor of Industrial
Economics and Management at KTH Royal
Institute of Technology in Stockholm, Sweden. His
research explores issues related to project
organization and leadership, project-based work,
and projectification of organizations and society. He
is a co-organizer of the international “Making
Projects Critical” workshop series, and an elected
member of the Swedish Project Academy.
Peerasit Patanakul is Associate Professor of
Management at the Pennsylvania State University,
Erie. His research interests include project portfolio
management, multiple project management, project
strategy, and managing government projects. His
works have been published in highly regarded
project management journals. He is a coauthor of
Case Studies in Project, Program, and
Organizational Project Management.
Jeffrey K. Pinto is the Andrew Morrow and
Elizabeth Lee Black Chair in the Management of
Technology in the Sam and Irene Black School of
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Business at Penn State University. He is the lead
faculty member for Penn State’s Master of Project
Management program. He is the author or editor of
twenty-four books and over 140 scientific papers.
Julien Pollack has managed projects in
organizational change, telecommunications, and
heavy engineering. He now works at the University
of Sydney teaching project management. His
research focuses on trends in project management
research, and developing project management to
meet the needs of ambiguous and contested
projects.
Kaye Remington teaches postgraduate students
at the University of Technology Sydney. Her
research interests focus on furthering understanding
of projects and programs in dynamic stakeholder
environments, with a particular interest in large-scale
public sector projects and programs, through the
application of complexity theory, psychology, and
design thinking.
Claudia Ringhofer is a researcher and lecturer at
Project Management Group, WU Vienna University
of Economics and Business, lecturer at the Danube
University Krems and the University of Applied
Sciences Steyr (all in Austria). She is a junior expert
of the consulting network, enable2change.
Rami Sariola is a doctoral student at the Laboratory
of Industrial and Information Management, Tampere
University of Technology, Finland. His publications
appear in International Journal of Project
Management and International Journal of Managing
Projects in Business. His dissertation deals with
suppliers’ role in construction project networks.
Aaron Shenhar is Professor of Project
Management and Leadership. After his aerospace
career, he served at Univ. of Minnesota, Rutgers,
Stevens, and Tel-Aviv University. He is founder
and CEO of the Diamond Leadership Institute
a knowledge-based company, focusing on training
and consulting in project management, leadership,
and strategy.
Joca Stefanovic has a doctorate in technology
management from Stevens. After a career in

engineering, development, and management
positions, he gained extensive experience in areas
of computer business: development, marketing/
sales, and support. He founded and grew
a company dealing in computer and other high-
tech equipment from start-up to a multimillion
dollar level.
Rodney Turner is Professor of Project
Management at SKEMA Business School, Lille
France, SAIPEM Professor of Project Management
at the Politecnico di Milano and Professor and High
End Foreign Expert at Shanghai University. He is
the author or editor of eighteen books, and editor of
The International Journal of Project Management.
His research areas cover project management in
small- to medium-enterprises, the management of
complex projects, governance of project
management, including ethics and trust, and project
marketing.
Stephane Tywoniak is Professor of Complex
Project Management at the Telfer School of
Management, University of Ottawa (Canada), and
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List of Contributors xv
Academic Lead of the Master of Business Complex
Project Management. His main research interest is
about how complexity plays out in projects, and
how management practices get institutionalized in
project-based organizations.
Kim van Oorschot is Professor of Project
Management at BI Norwegian Business School.
Her research focuses on decision making and
trade-offs in dynamically complex settings, like
new product development (NPD) projects. Her
research projects are aimed at discovering so-called
“decision traps”: decisions that seem to be good on
the short term, but have counterproductive effects
on the long term.
Lauri Vuorinen is a doctoral student at the
Laboratory of Industrial and Information
Management, Tampere University of Technology,
Finland. His doctoral dissertation focuses on the
practice of project control in different project
environments. His current research interests deal
with project control, project lifecycle value, and
multi-project management.
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 Foreword
Mats Engwall’s often quoted insight that “no pro-
ject is an island” has had important implications for
researching projects, perhaps the most popular form
of temporary organizing. Research has since then
increasingly paid attention not only to the temporal
and spatial, but also the relational and organiza-
tional context of projects. For very good reasons,
this has caused more and more researchers to
abstain from trying to unearth or formulate “general
principles” for project management. Instead, much
more contextual and processual approaches are pre-
ferred nowadays, reflecting significantly better
reflexive project management practice. At the
same time, the discipline of project management
has profited a lot from management, organization,
and network theory developed and advanced in
other fields, even from more abstract and formal
cultural and social theory. All these theories empha-
size the importance of context and process.
This Cambridge Handbook of Organizational
Project Management picks up these trends and
even goes beyond capturing the organization as
a relevant context for temporary organizing by
investigating project management at the organiza-
tional level of analysis. Thereby, it nicely bridges
micro-organizational behavior and more macro-
organizational theory perspectives. As a conse-
quence, the Handbook is a more than welcome
basis for continuing the conversation among
researchers in the fields of organizational behavior
and theory, and project management – and also
among managers and consultants – about sequences
of projects, or even entire programs or project port-
folios, as forms of temporary organizing embedded
in more permanent structures, such as organization
in the field of business, public administration, or
non-for-profit organizations.
The authors of the Handbook, who come from
eleven different countries, focus rather strictly on
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the organizational level of analysis in which pro-
jects, programs, and portfolios interact intricately
with each other. More often than not, the required
(multi-) project management is supported by spe-
cialized, permanent organizational units such as the
project management office. The twenty-five contri-
butions to the Handbook, many of which are based
on literature reviews and illustrations with the help
of case studies, deal with such formal organizational
structures. But they also consider the often comple-
mentary and/or conflicting informal organizational
networks around project teams for instance. Also at
the organizational level of analysis, the contribu-
tions discuss frequently neglected strategic issues,
business aspects of projects, project management as
an organizational capability, project and program
governance within and across organizations, as
well as change management, human resources,
extra-role behavior, distributed leadership and
stakeholder networks. Considering the limitations
of classical approaches to (project) risk manage-
ment, one chapter deals with the increasing roles
of Knightian uncertainties (unknown unknowns,
possibly even unknowables). Interestingly also,
one of the later chapters discusses regional clusters
as an increasingly important context for project and
multiproject management.
Overall, the three editors of the Handbook seem to
have skillfully managed the project of “conceptualiz-
ing and compiling a handbook” and produced the
desired outcome: a timely, well-structured publica-
tion with many insightful chapters providing a
much needed organizational perspective on project
management and offering manifold insights into this
important field of temporary organizing.
Jörg Sydow
Berlin-Dahlem
xvii
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 Introduction
SHANKAR SANKARAN, RALF MÜLLER, and NATHALIE
DROUIN
“An idea can only become a reality once it is broken
down into organized, actionable elements.”
― Scott Belsky, Making Ideas Happen: Overcoming
the Obstacles Between Vision and Reality
The idea to develop the concept of Organizational
Project Management (OPM) from an organization
theory perspective started six years ago when the
three editors met at the Umeå School of Business
and Economics in the winter of 2011. First, we
collaborated on a research book on project man-
agement (Drouin, Müller & Sankaran, 2013), the
aim of which was to urge project management
researchers to adopt novel transformational and
translational methods in their research to contri-
bute to the development of OPM research meth-
ods. This book was successfully published in 2013
and was received favorably by international scho-
lars. We then decided it was time to revisit the
latest developments in the growing field of OPM,
and Cambridge University Press enthusiastically
agreed to publish this book. After looking at
the list of authors submitting chapters to the
book, CUP suggested that the book be titled the
Cambridge Handbook on Organizational Project
Management. As far as the authors are aware, this
is the first such handbook to promote the concept
of OPM. In line with Belsky’s quote, the idea of
developing the concept of OPM became a reality
as soon as we started to assemble this handbook
in an “actionable” manner, with the support and
collaboration of eminent scholars and colleagues
in the field of project management.
Why This Handbook Now?
Over the past two decades, OPM has emerged as an
academic field focused on how project, program,
and portfolio management practices help firms
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strategically to realize organizational goals (Chia,
2013, p. 37). In 2012, Drouin and Besner edited
a Special Issue on Projects and Organizations in
the International Journal of Managing Projects
in Business, which included several papers
explaining project management’s relationship to
organizations. While Cooke-Davies et al. (2001)
acknowledged that “there is a growing recognition
that project management involves more than the
skillful and competent management of individual
projects” (p.1), Drouin and Besner (2012, p.176)
noted that “projects are seen as venues for master-
ing business, implementing changes, innovating
and developing competitive advantage.” This
means project management transcends the man-
agement of single projects by establishing rela-
tionships between individual projects and the
wider organization through the management of
multiple projects (Drouin, Müller & Sankaran,
2013). Aubry, Hobbs, and Thuillier (2007) used
the term OPM to describe such an approach, where
project-based organizations integrate multiproject
management activities to deal with strategic align-
ment, portfolio and program management, and
governance (Aubry, Sicotte, Drouin, Vidot-
Delerue & Besner, 2012).
But what is OPM? What is the relationship
between OPM and the organization? These are the
questions that will be addressed in this handbook.
The editors felt that there is a compelling need in
the market for an organization-level book that
addresses the totality of project-related work in
organizations and not just in individual projects
for which there are many existing publications.
Such a text should address projects from an orga-
nizational level by providing a view of organiza-
tions as a network of projects (or temporary
organizations), which need to be coordinated
among themselves and with the more permanent
 2 Shankar Sankaran, et al.
organization, but away from the focus on indivi-
dual projects.
This handbook is intended to fill this need by (1)
clarifying what OPM is, and (2) covering and
clearly defining its importance to the organization.
It includes concepts and theories from various dis-
ciplines allied to project management, such as stra-
tegic management, organization science, and
behavioral science, to enrich our understanding of
OPM. We hope that this multidisciplinary approach
will provide guidance to academics to further inves-
tigate this new phenomenon. The book also includes
a few case studies to aid practitioners in understand-
ing the importance of OPM.
The Sections of This Handbook
The handbook has four parts: Strategy,
Organizations, People, and New Directions. Each
section plays a key role to guide the reader through
the journey of understanding and appreciating
OPM.
Part I fulfils the need for OPM to be considered
as a strategic asset for the organization. Part II
raises the need to reflect on organizational struc-
ture, and Part III highlights the important role of
people in organizations. Part IV introduces some
emerging concepts that we think will add to
adoption of OPM by expanding its reach beyond
our current understanding of OPM. The OPM
concept seems obvious and quite simple but it is
not so easy to achieve in practice. Do not expect
the chapters to be in a perfect logical order as the
evolution of the OPM concept is certainly not
linear. However, to clarify our thoughts, we pro-
pose each section to be organized along the fol-
lowing lines:
Part I covers Strategy, with an intent to explore
the `foundations underlying strategic issues
faced by organizations and the role of OPM in
order to derive a well-grounded definition of the
concept of OPM, and its scope, and contents.
By doing this, OPM is positioned as a venue
for developing sustainable competitive advan-
tage for firms.
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Part II covers Organizations, reflecting on and
broadening the current set of theories, concepts,
and knowledge discussed in recent years in the
literature, with regard to organizational structure
and design, and their links to OPM. OPM
requires a set of systems, processes, and struc-
tures that enable an organization to undertake the
right projects and to support them organization-
ally. This means going beyond the management
of single projects to consider the management of
networks of internal and external projects and
the relationships between the company and the
management of multiple projects (Andersen &
Jessen, 2003).
Part III covers People, as the management of people is
recognized to be a key success factor in project
management. This part will include research from
areas that are allied to OPM, such as sociology,
psychology, and human resource management.
It will use multidisciplinary approaches to provide
guidance on integrating theories, concepts, and
approaches from allied fields to complement,
expand, and enrich the OPM concept.
Part IV includes chapters that we hope will take
OPM research to new avenues that are not
often addressed in the field of project manage-
ment but which are essential to increase research
quality and generate novel insights. We believe
that these chapters cover areas of increasing
importance for the future development of OPM.
Why Is It Different?
While there are several noteworthy handbooks on
project management by prominent scholars, this
book takes a new direction by drawing the focus
away from individual projects and their manage-
ment. It has been conceived as an organizational-
level handbook that addresses the totality of
project-related work in organizations. Thus it
has shifted the focus from individual projects,
through the structuring of project management
and its projectification, toward the integration of
all project management-related activities and
dynamic processes in complex environments.

Target Audience
The book is positioned as an academic handbook
with the aim to highlight and build on the current
state of knowledge in the field and to identify
future research directions in OPM. OPM has
been discussed and used in the literature but it is
time to clarify its meaning and related concepts in
order to expand and enrich OPM research.
The chapters are expected to be prescribed as
supplementary readings at postgraduate courses
in universities. Case studies in the book would be
useful to practitioners.
In sum, the idea of OPM that we started with has
taken a shape through concrete action as the
Handbook of Organizational Project Management
with the help of all the contributors to this hand-
book, who overcame obstacles to turn a vision into
reality.
The editors have a number of people to thank for
helping us to get this book ready.
First we would like to thank all the authors from
across the world who devoted their time to contri-
bute chapters to the book.
We would like to thank Dr. Gita Sankaran for
the initial copyediting of chapters and making
useful suggestions to improve the content and
assisting in the final checking of the chapters
during proof reading. Thanks are due to Karyne
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Introduction 3
Ang who helped us to project manage the book and
to compile the index.
We thank Professor Jörg Sydow for writing the
foreword. We also thank Professor Stewart Clegg
from the University of Technology Sydney for sup-
porting us to write and promoting the idea at the
Academy of Management Meeting at Anaheim in
2016.
The people at Cambridge University Press deserve
our special thanks for working with us closely to
release the book as expected, in particular Paula
Parish, who was our original contact at CUP, Valerie
Appleby, who took over from Paula, Emma Collison,
and James Gregory. We would also like to thank
Karthik Orukaimani of Integra and his team for pro-
ject managing the final production and Brian Black for
his excellent final copyediting that was appreciated by
several of the authors. We would also like to thank
many others who have worked in the background at
CUP and Integra to get this book ready on time.
Thank you to our families for bearing with us
when we spent time having late-night Skype meet-
ings to get the handbook ready on time.
Finally, we would like to thank our institutions,
the University of Technology Sydney, University of
Quebec at Montreal (UQAM), and BI Norwegian
Business School for their support in providing us
with valuable time to edit and write chapters for the
handbook.
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 PART I

Strategy

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 INTRODUCTION TO PART I
Nathalie Drouin
Part I of this book is a stepping-stone to elucidate
the concept of Organizational Project Management
(OPM). It discusses a central connection between
OPM and the organization – the strategy.
Organizations use strategy to integrate their project
management activities in an effective, responsive,
and sustainable manner. To explore and deepen
these ties between the organization, its strategy
and OPM, Part I gathers and blends the views of
well-known scholars who have studied these rela-
tionships through different lenses for many years.
These authors used a multidisciplinary approach,
building their knowledge on the shoulders of
eminent academics and their theoretical research
in the field and by using empirical studies and
mixed-methods approaches to develop a better
understanding of OPM.
Part I begins with a chapter on “The Nature of
Organizational Project Management through the
Lens of Integration,” by Nathalie Drouin,
Ralf Müller, and Shankar Sankaran. From an
ontological perspective, OPM is defined as “the
integration of all project management-related activ-
ities throughout the organizational hierarchy or net-
work.” Using the lens of integration, OPM is
recognized as a mechanism that integrates,
combines, and embeds project management activ-
ities strategically and effectively within the
organization.
Chapter 2 is “The Business of Projects in and
across Organizations,” by Miia Martinsuo, Rami
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Sariola, and Lauri Vuorinen. Based on three
empirical studies, this chapter outlines the business
of projects through the decisions that occur in
the different phases of a project’s lifecycle.
It challenges project sponsors to “do the right
things” in delivery project contexts, and shows
how various stakeholders engage with the project
network. It suggests that OPM promotes coopera-
tion and communication between stakeholders, and
takes into account their evolving needs in critical
business decisions over the project’s lifecycle.
It is followed by Chapter 3, on “Strategic OPM:
Why Companies Need to Adopt a Strategic
Approach to Project Management,” by Vered
Holzmann, Aaron Shenhar, and Joca Stefanovic.
Using a three-dimensional strategic project
management maturity model, these authors
hypothesize that additional focus on strategic
aspects of projects will contribute greatly to the
improvement of project business performance.
They suggest that OPM should be built in
accordance with this premise, predicting that
OPM will become more strategic in the future
and help projects to focus on achieving business
results in addition to the traditional efficiency
delivery goals.
Chapter 4 by Kam Jugdev on “Strengthening the
Connections between Strategy and Organizational
Project Management” introduces the reader to
selected concepts in strategy by four scholars: Grant,
Porter, Barney, and Mintzberg, and highlights their
 8 Nathalie Drouin
key contributions. It also highlights the limitations of
the Project Management Institute’s perspective on
OPM, proposing that OPM is a tangible and intangible
resource and a vehicle for developing sustainable
competitive advantage.
The last chapter of Part I is Chapter 5 on “Project
Portfolio Management: A Dynamic Capability and
Strategic Asset” by Catherine P. Killen and Nathalie
Drouin, which shows how dynamic capabilities are
developed in organizations and how they can create
and sustain competitive advantage by enabling
organizations to reconfigure resources in response
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to change. It highlights that project portfolio man-
agement (PPM) as a dynamic capability is also
a strategic asset of OPM to implement changes
and sustainable competitive advantage in organiza-
tions. In sum, it proposes that dynamic OPM is
enabled through PPM – and therefore when acting
as a dynamic capability, PPM is a strategic asset for
OPM.
We hope you will enjoy reading this first part
of the book and gain a better understanding of
OPM viewed through the lens of organizational
strategy.
 CHAPTER
1
The Nature of Organizational Project
Management through the Lens
of Integration
NATHALIE DROUIN, RALF MÜLLER, and SHANKAR
SANKARAN
Introduction
This chapter focuses on defining and making sense
of what organizational project management
(OPM) is through the lens of integration. In this
chapter we share our views on how we understand
and define OPM so that the authors who have
collaborated with us in this book are not only
able to understand and critique our view, but can
also discuss and relate their particular chapters to
OPM. We urge readers of this book to help us
improve, clarify, and broaden our initial thoughts
on the nature of OPM. We derive our thoughts
from the perspective of organizational integration,
which we see as a necessity for organizing, and as
a task that is becoming increasingly harder to
achieve, due to the growing complexity of organi-
zational design (Child, 2005). We argue that
new ways of managing projects, by integrating
all project management-related activities in an
organization, are now needed to deliver projects
to meet the continuously growing expectations of
stakeholders. We propose our concept of OPM as
a way for managers in charge of managing the
organization and governing projects to meet
these expectations.
We begin this chapter by offering a definition
of OPM from an organizational theory (OT)
perspective. We then present evidence in OT
that discusses integration to support our defini-
tion. Finally, we discuss the nature of OPM by
proposing it as a mechanism for integrating
project management-related activities in
organizations.
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What Is Organizational Project
Management?
In this section we develop our definition of OPM.
The term OPM has two parts – organization and
project management. Organization theory (OT)
acts as the foundation and lies at the heart of
a definition for OPM. Through its key concepts,
such as organizational structure, organizational
forms, and the concept of integration, OT brings
interesting perspectives that help us to grasp the
concept of OPM. Therefore, in this chapter we
propose a definition of OPM through the lens of
OT, with a specific focus on the concept of
integration.
How did the concept OPM evolve? In 2012,
Drouin and Besner edited a “Special Issue on
Projects and Organizations” in the International
Journal of Managing Projects in Business. This
issue included several papers explaining project
management’s relationship to organizations.
Drouin and Besner (2012, p. 176) noted that “pro-
jects are seen as venues for mastering business,
implementing changes, innovating, and developing
competitive advantage.” They also point out that
project management is changing from a focus on
the management of individual projects to examining
the relationships between individual projects and
the wider organization by taking into account the
management of multiple projects (Drouin & Besner,
2012).
Looking more specifically at the relationship of
project management and organizations, several
definitions of OPM have been proposed from
 10 Nathalie Drouin, Ralf Müller, and Shankar Sankaran
different perspectives. For instance, the Project
Management Institute (PMI) takes a management
viewpoint, proposing OPM capabilities at the pro-
ject, program, and portfolio management levels as
independent variables, and project performance at
the respective level as the dependent variable.
In their definition, OPM “is a strategy execution
framework that utilizes portfolio, program, and pro-
ject management as well as organizational-enabling
practices to consistently and predictably deliver
organizational strategy to produce better perfor-
mance, better results, and a sustainable competitive
advantage” (PMI, 2013, p. 239). Aubry, Hobbs, and
Thuillier (2007) use the term OPM to describe an
approach by which project-based organizations
integrate multiproject management activities to
strategically align portfolio and program manage-
ment, and their governance. These authors have
defined OPM as “a new sphere of management
where dynamic structures in the firm are articulated
as a means to implement corporate objectives
through projects in order to maximize value”
(Aubry et al., 2007, p. 332). They emphasize the
dynamics of organizing and have bridged the view
of OPM from management theory to organizational
theory. We take Aubry et al.’s definition as our
starting point, and enhance its OT perspective by
emphasizing the need for “integration” as a key
concept for OPM to be adopted in practice.
Hence, we define OPM as:
The integration of all project management-related
activities throughout the organizational hierarchy
or network.
Let us now explore the term “integration.”
According to the Oxford Advanced Learner’s
Dictionary (2016), integration is “the act or pro-
cess of combining two or more things so that they
work together.” Lawrence and Lorsch (1967),
who discussed integration and differentiation in
complex organizations, defined integration as the
collaboration required to achieve unity of effort.
We propose that OPM be viewed as the act or
process of combining (integrating) project man-
agement activities throughout the organization,
and point out the importance of collaboration
required to achieve unity of effort. Thus, OPM
takes a holistic perspective on the project
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management-related activities an organization
embarks on as an integrative mechanism of
PM activities, in a network of strategic
and collaborative initiatives governed and sup-
ported at the organizational level. The next section
explores this definition, further linking it to
modern organizational theory and its concept of
integration.
Organizational Theory, Project
Management, and Integration
Organizational Theory in Brief
Several prominent project management scholars
have argued that OT has the potential to offer
helpful insights into the field of project manage-
ment (Turner & Müller, 2003; Morris & Geraldi,
2011). For instance, some scholars have applied
OT to project management research using theore-
tical perspectives such as the resource-based view
(Jugdev & Mathur, 2013), dynamic capabilities
(Killen et al., 2012; Petit, 2012; Salunke et al.,
2011), absorptive capacity (Killen et al., 2012),
and contingency theory (Hanisch & Wald, 2012;
Sauser et al., 2009; Engwall, 2003; Andres &
Zmud, 2002; Shenhar, 2001) or, more recently,
institutional contexts to theorizing project-based
organizing (Morris & Geraldi 2011; Lundin et al.,
2016). However, in our view, OT’s potential has
remained underutilized in the project management
arena.
OT helps to contribute to the understanding of
the structure, functioning, and performance of
organizations, and the behavior of groups and
individuals within them. Prominent OT scholar
Child (2005) recognized that the success of any
organization depends on two fundamental require-
ments, strategy and organization; in other words,
paying importance to organizing the organizational
activities to link it with its strategy. Child (2005)
also observed that if an organization’s structure is at
fault, it will not be able to deliver adequately on its
strategy, as the formulation of a sound strategy
requires the knowledge and insights provided at all
levels in the organization. An organization has
structural, processual, and boundary-defining facets
 The Nature of Organizational Project Management
(e.g., basic structure distributes responsibilities
among the members of the organization to
successfully implement its business objectives).
Organizational processes comprise integration that
ensures adequate coordination between different
activities, control that monitors their attainment,
and, finally, reward to motivate people (Child,
2005). Child (2005) also highlighted that in an
organizational context, there is emphasis on
managing relationships between roles and organiza-
tional units to achieve a creative and proactive
synergy between them, further implying that greater
attention should be paid to integration.
OT and Project Management in Brief
In this section we point out some views expressed
by project management researchers that link OT to
project management.
Among project management researchers,
Packendorff (1994) was one of the first to reflect
on the integration aspect of organization theory
and its importance to the project management
field. He identified three organizational themes
as being applicable to projects as temporary orga-
nizations. First, projects are seen as temporary
organizations that overlap a number of organiza-
tional subunits within a permanent organization;
second, communication that applies to projects
needs to cover the internal organization as well
as entities in the external environment; and
finally, the applicability of leadership and motiva-
tion to projects. Packendorff (1994) also identi-
fied some minor themes such as cultural theory,
network theory, and the notion of management by
projects. Other researchers took the perspective of
temporary organizational settings to critique and
increase the understanding and role of projects
and its relationship with OT. For instance,
Lundin and Söderholm (1995) proposed an
action-based “theory of the temporary organiza-
tion,” which identified the four internal dimen-
sions of projects – time, task, team, and
transitions – as the cornerstones of temporary
organizations. Turner and Müller (2003) took an
OT- and organization-wide view by describing
the nature of the project as a temporary organiza-
tion that fulfills the production function of a firm
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11
through several agency roles within the wider
organization. This is closer to what we propose
as the OPM perspective, as Turner and Müller
(2003) also confirmed the need for integration to
deliver beneficial objectives of change resulting
from projects.
Midler (1995) elaborated on the “projectifica-
tion” of the firm. Söderlund and Müller (2014)
emphasized the impact of the Rethinking Project
Management research carried out in the United
Kingdom (Winter, Smith, Morris, & Cicmil,
2006), where it was advocated that projects
should be looked at from a broader, more holistic
perspective. More recently, the International
Journal of Managing Projects in Business pub-
lished a Special Issue on “Reflections of 10 years
of rethinking project management – legacy and
future” (see Walker, 2016), which explores new
perspectives of what project management is and
raises the importance of encouraging research that
advances reliable and rigorous understanding of
project management in organizations.
The above shows that a variety of different
approaches to integrate projects and their wider
organizational context is gaining prominence.
However, none of these use an OT perspective
to strengthen the integrated and holistic under-
standing of all project-related activities, such as
the one proposed in our definition of OPM.
We therefore select the lens of integration, and
aim to contribute to a better understanding of
OPM through the use of OT to view project
management.
The Lens of Integration
In this section, we take a closer look at integration,
the various views on how to achieve integration and
some of the difficulties faced in achieving it.
According to Child (2005), integration “signifies
coordination, cohesion and synergy between differ-
ent roles or units in an organization whose activities
are different but interdependent in the process of
creating value. The concept could be applied to
vertical relations (e.g., a cohesive process of con-
trol) or to horizontal relations across an organiza-
tion” (2005, p. 79). We expand on these concepts
 12 Nathalie Drouin, Ralf Müller, and Shankar Sankaran
(coordination, cohesion, and synergy) based on the
following views by prominent scholars:
• People coordinate their efforts so they can do
more than any one person could achieve indivi-
dually. In society, organizations intend to do more
through the coordination of the activities of many
individuals. “It is the idea of coordination of effort
in the service of mutual help” (Schein, 1998
p. 13). According to Schein (1988 p. 15), “coor-
dination is implemented by the laying out of
a kind of blueprint of who is responsible for
what.” Coordination is a pattern of roles that
promote the commonly agreed-upon goals.
• Cohesion has been plagued with contradictory
definitions and difficulties in being operationa-
lized (Moody & White, 2003). We define
“cohesion” in line with Festinger, Schachter,
and Back (1950) as a field of forces that act on
members to remain in the group. It is the
action or condition of cohering; cleaving or
sticking together (Oxford English Dictionary,
2000). Cohesive groups should display
connectedness.
• Synergy is the combined working together of two
or more parts of a system, so that the combined
effect is greater than the sum of the efforts of the
parts (Campbell & Sommers Luchs, 1998).
Lawrence and Lorsch (1967) defined integration
not as coordination, cohesion, and synergy as pro-
posed by Child (2005) but as the collaboration
required to achieve unity of effort (i.e., getting
everyone to pull in the same direction) (Hatch &
Cunliffe, 2013, p. 101). Organizations use hierar-
chy as the most common integration mechanism,
creating formal reporting relationships that allow
managers to coordinate activities and resolve pro-
blems through the exercise of authority. Other
integration mechanisms include: formal rules,
procedures, scheduling, liaison roles, committees,
task forces, cross-functional teams, and direct
communication between departments (Hatch &
Cunliffe, 2013, p. 101). Lawrence and Lorsch
(1967) concluded that appropriate methods of
integration vary depending on the organization
and the relevant environment. For instance, their
research shows that the methods of integration
favor stable environments where hierarchy and
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centralized coordination prevail, while in unstable
environments there is a need to bring decision-
making to lower hierarchical levels and use direct
communication with those possessing suitable
knowledge.
Thus, there are various mechanisms for strength-
ening integration, from simple arrangements for
people to meet periodically to complex, multidi-
mensional structures in which the contributions of
specialized units are coordinated through a matrix
arrangement (Child, 2005). Achieving integration is
challenging and the lack of integration can have
regrettable consequences on organizational perfor-
mance. We often hear people say “the right hand
does not know what the left hand is doing,” as a way
of expressing the lack of integration, coordination,
and collaboration within a firm. Integration could
take many forms at different organizational levels
and has various loci. For instance, integration
occurs between corporate and divisional levels in
multinational firms, which requires coordination,
cohesion, and collaboration between the two
levels to develop and manage business activities.
Integration also takes place between functions
within an organization. In this case, integration
involves organizing the internal peripheries or
departments of a firm to collaborate and work
together.
Securing integration within a firm or across its
subsidiaries in a multinational context is tradition-
ally achieved by top managers. According to Child
(2005), “new organizational thinking favors the
decentralization of such initiatives so that the
people directly concerned can come together
and decide how to reconfigure capabilities without
having to rely on, and wait for, the decision of senior
managers distanced from the scene” (2005, p. 90).
It is like recreating a microcosm, a process for deal-
ing with the issues at hand. Its purpose is to integrate
the people with the relevant knowledge in the situa-
tion to make more effective decisions. It is a lateral
organization (Galbraith, 1994) that brings together
a decision group of the most relevant people to
collaborate for performing common tasks. Teams
(of all types: project teams, cross-functional teams,
etc.) (also see Chapter 14) are one of the most
commonly used means for achieving integration in
new organizational practices (Child, 2005).
 The Nature of Organizational Project Management 13

We believe that the lens of integration is an
interesting angle to base our understanding of the
nature of OPM. Success in achieving integration
using OPM lies primarily in an organization’s abil-
ity to integrate the project management resources,
processes and systems, and apply them flexibly to
manage project activities strategically within the
organization. OPM facilitates the coordination,
cohesion, and collaboration across project manage-
ment activities and across the organization to
manage these activities more effectively. It brings
the decision-making required to manage project
management activities to the hierarchical levels in
an organization that is charged with taking actions
that contribute to the success of PM activities. This
has to be achieved in a synergistic manner along the
hierarchical levels. This creates the PM microcosm
to manage PM-related activities successfully at the
right hierarchy. In the next section, we expand on
the nature of OPM as an integrative mechanism.
The Nature of OPM as an Organizational
Integrative Mechanism
So far, we have anchored our discussions in trying
to understand the contributions of organization
theory and its related concept of integration. Based
on what we have learnt from these studies, we
believe that the concept of OPM should be primarily
grounded in organization theory. This will contri-
bute to enabling organizational effectiveness by
organizing and integrating the resources, and
capabilities that allow organizations to perform in
specific ways that are critical to business perfor-
mance (Mohrman et al., 1988). OT and its concept
of integration can direct us toward mechanisms that
are useful to develop and deploy in an organization
to achieve integration. Thus, proposing OPM as an
integrative mechanism becomes a matter of empha-
sizing its strategic implication for the integration of
the structures, processes, and practices of all project
management-related activities throughout the orga-
nizational hierarchy or network in an effective man-
ner. OPM can provide managers with an overall
sense of how capable the organization is to manage
its projects and related activities. It encourages
firms to develop project management knowledge
to achieve greater effectiveness. It enables top
managers to develop best practices to enhance the
quality of information available to the boards of
directors and senior management who are respon-
sible for the success of projects. It also helps identi-
fying the skills and know-how required to manage
these projects, and strengthen their accountability.
Figure 1.1 illustrates the nature of OPM seen
through the lens of integration and each component
is explained further in this chapter.

ORGANIZATION

PROJECT MANAGEMENT
RELATED ACTIVITIES

Governance
OPM : The integration
INTEGRATION

of all project Portfolios

management-related INTEGRATION Organizational
activities throughout Effectiveness
the organizational Programs
hierarchy or network
Projects

Figure 1.1. OPM and its lens of integration.

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 14 Nathalie Drouin, Ralf Müller, and Shankar Sankaran

Project Management-Related Activities the project management bodies of knowledge,

and several aspects of people working in
We now turn our attention to project management
projects are increasing in importance to enable
(PM) and how it can contribute to an organization’s
the delivery of projects. This will require
strategy using the concept of OPM. This section will
discussions about human resource management
also refer to chapters in the book that expand on
(Huemann et al., 2007; see also Keegan,
aspects of PM that can contribute to OPM.
Huemann, & Ringhofer, Chapter 11 ), stakeholder
Effective project management can help enable
management (Eskerod & Jepsen, 2013; Eskerod,
projects to be used for profitable, sustainable
Chapter 12), leadership (Müller & Turner, 2010;
business. Projects are often created to accomplish
Müller, Packendorff, & Sankaran, Chapter 13),
an organization’s strategy (Müller, 2009, p. 15), and
project teams (Bourgault et al., 2009; Drouin &
project management is an effective tool for execut-
Sankaran, Chapter 14), knowledge management
ing an overall organizational strategy (Cleland &
(Disterer, 2002; Hofman & Boyle, Chapter 15;
King, 1988). Thus, to utilize projects well, we need
Algeo & Connell, Chapter 18), and change
to start by understanding why organizations should
management (Crawford & Nahmias, 2010;
invest in projects and do this from a perspective
Pollack, Chapter 16).
linking organizational strategy and projects. This
Some other worldviews of projects are also gain-
could lead to discussions on the nature of project
ing prominence in the literature – ethics (Müller
business (Artto et al., 2001) as well as methodolo-
et al. 2013; Kvalnes, Chapter 19), value (Thiry,
gies used by businesses to deliver their strategies
2002; Ang & Biesenthal, Chapter 20), complexity
(Shenhar & Dvir, 2007).
(Cicmil et al., 2009; Remington, Chapter 21), sus-
From an organizational perspective, we need to
tainability, and innovation (Kock & Gemuenden,
look at how an organization can effectively
2016; see Keeys & Huemann, Chapter 22; and
integrate the governance and management of its
Van Oorschot, Chapter 24).
portfolios, programs, and projects to deliver orga-
There are similarities between the management
nizational strategies (Müller, 2009). Projects are
of projects in an organization and the production
delivered by multiple organizations working
function of a firm (Kock & Gemuenden, 2016).
together, which also calls for a discussion on inter-
While the production function is charged with
organizational projects and collaboration (Clegg
producing products and services efficiently,
et al., 2002). As projects transcend geographical
project management is often charged with:
borders, there are also concerns about the risks and
(a) delivering bespoke products or services to
opportunities, and the impact of increasing compli-
customers through projects; or (b) implementing
ance requirements that organizations have to meet,
strategic initiatives for the firm more efficiently
covering local, international, and environmental
than any other function. In performing these
regulations (Tarantino, 2008).
functions, the project manager acts as the CEO
Second, project management scholars have
of a temporary organization that needs to be
provided influential insights for project-based
aligned continuously with the firm’s strategy,
organizations with regard to linkages between
objectives, and capabilities (Turner & Müller,
temporary and permanent organizations
2003). However, all related project management
(Janowicz-Panjaitan, Bakker & Kenis, 2009).
activities, also need to be governed, integrated,
This highlights the importance of structuring the
and supported at the organizational level by man-
management of projects from an organizational
agers outside the project organization who are
perspective. For example, Aubry and Lavoie-
involved in decision-making related to projects
Tremblay in Chapter 9 in this book propose
and who understand the importance of projects
a more comprehensive view of the strategic use
and their related activities to the overall organi-
of PMO using organizational design.
zation (see Turner & Müller, Chapter 6 on the
Third, the importance of the people delivering
governance of OPM).
projects has gained increasing attention from

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 The Nature of Organizational Project Management 15

Integration and Project Management surprising that academics tend to focus on one
or a few variables to analyze effectiveness.
As discussed earlier, there are various mechanisms
No universal model of effectiveness has emerged.
for strengthening integration, such as periodic
For more details on organizational effectiveness, we
meetings between people or multidimensional
refer readers to the chapter by Kim Cameron in
structures in which the contributions of specialized
Smith and Hitt (2009).
units are coordinated through a matrix arrangement.
In this chapter, we propose OPM as another
Teams, project teams, and cross-functional teams
mechanism that can contribute to organizational
are the most commonly used means for achieving
effectiveness. OPM per se is an attempt to organize
integration (Child, 2005). Success in achieving inte-
project activities to link with the organization’s
gration using OPM lies primarily in OPM’s ability
strategy. It comprises power structures within its
to integrate the project management resources, pro-
project components, administrative structures such
cesses, and systems and apply them flexibly to
as project management offices (PMOs), standards in
manage project activities strategically within the
conducting projects, relationships between project
organization. OPM creates a microcosm that
governance, program and project management, and
facilitates the coordination across project manage-
relationships and cohesion among and between the
ment activities (vertically) and across the organiza-
team members and other individuals in charge of
tion (horizontally) and externally through projects
project activities.
delivered by multiple firms. OPM, as a perspective
OPM is thus the ability to organize project
toward work in an organization, enables the
activities not only at the project level, but at the
collaboration required to achieve unity of effort of
wider organizational level. By shaping the project
project-related activities. It is a new organizational
systems, processes, and structures, OPM has the
mechanism that favors the decentralization of the
potential to have an impact on a firm’s effective-
PM initiatives within a firm so that people who are
ness to achieve competitive advantage. This
directly concerned with project-related activities
makes OPM a multidimensional concept, which
are the decision-makers, rather than managers who
includes variables such as group relations and
are distant from the scene. To that end, an OPM
dynamics (e.g., goals, tasks, project leader), sys-
perspective streamlines organizational activities to
tems and structures (e.g., control system, power
foster project delivery in the most effective and
structure, and administrative structure such
efficient way possible within, across, and outside
PMOs), and some variables related to the context
the organization.
(project resources and capacity) (Handy, 1993).
Organizations are effective to the extent to which
Organizational Effectiveness they deploy appropriate resources. Successful
management of firms’ project management-
How does OPM contribute to organizational effec-
related activities needs OPM to be exploited as
tiveness? Some authors argue that the goal-based
a way of implementing strategies in effective and
model is the most appropriate to achieve organiza-
productive ways through the management, inte-
tional effectiveness since it proposes that the most
gration, and transformation of all project manage-
effective firms are the ones that accomplish their
ment activities.
stated goals (Cameron, 2009). Pfeffer and Salancik,
on the other hand, argued for a resource dependence
model, stating that organizations are effective to the Concluding Remarks
extent to which they acquire the required resources
(in Cameron, 2009, p. 307). Handy (1993) identified In this chapter, we have used a specific perspective
over sixty different variables (e.g., leadership, toward organizations based on OT, which inte-
group relations, systems and structures, environ- grates all project-related work, actors, roles, and
ment, motivation to work) as factors affecting orga- processes of an organization. We also extended the
nizational effectiveness. It is therefore not view of temporary organizations as an agency to

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 16 Nathalie Drouin, Ralf Müller, and Shankar Sankaran
fulfill the production function by arguing that
the temporary organization (or project) is the
organization per se, with all other entities support-
ing it for effective and efficient project delivery.
We integrate the patchwork of existing perspec-
tives, such as those established through initiatives
like “Making projects critical,” or “Rethinking
project management” and the work of Aubry
et al. (2007) and Turner and Müller (2003), who
all take the perspective of organizing for OPM. All
this leads to the dawn of a new perspective, which
is the OPM view (in and of itself constituting
a particular worldview) – an ontology. It is now
up to the reader to decide whether OPM can
become a reality. For those who believe it can,
we have provided some justification; and for
those who don’t, we provide some food for thought
to reconsider their stance.
Finally, the contributors to this volume have pro-
vided us and the readers with a potpourri of insights
and avenues for integration. We are very grateful for
their contributions to the book for the development
of OPM.
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.2006.08.009.
 CHAPTER
2
The Business of Projects
in and across Organizations
MIIA MARTINSUO, RAMI SARIOLA, and LAURI
VUORINEN
Introduction
The goal of organizational project management is to
ensure that projects are doing the right things in the
right way to fulfill the purpose of the organization.
In commercial firms delivering projects, this
implies that, in addition to designing and delivering
solutions efficiently, projects must also serve as
vehicles for business. Project business refers to
any project-related business that intends to fulfill
a firm’s or network’s objectives (Artto &
Wikström, 2005).
Where and how does “business” take place in
projects? A great deal of attention in project
management has addressed activities “after the
business” (i.e., the planning, implementation, and
control of single projects) and “before the business”
(i.e., the marketing and selling of projects).
Recently, more research has emerged “above the
projects,” such that project portfolio management
and program management have begun to link pro-
jects with the strategies of their parent organiza-
tions. In particular, the selection of a project
appears to be a business-critical issue, since prices
are fixed, contracts are made, and resources are
allocated to fulfill the project objective.
In our view, the selection and launch of a project
are by no means the only business-defining events
in the project’s life cycle. Each delivery project
must be managed profitably, such that business
value is defined and created throughout the project
life cycle, often at the interfaces of different firms.
Indeed, many of the business choices made over
the life cycle of a project cross the boundaries of
different organizations (e.g., Artto et al., 2016;
Martinsuo et al., 2010). Project governance and
control, however, tend not to take these
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cross-organizational and business views sufficiently
into account. Earlier research has considered the
business-related issues of project life cycles in
a very scattered way; therefore, our intent is to
build a framework for the critical business decisions
that occur over a delivery project’s life cycle.
This chapter is concerned with the business of
projects. We outline the business of projects
through the decisions that occur at the front end of
projects, the management control of projects during
project execution, and the postproject decisions
needed to build continuous customer interaction
over the life cycle of product use. More specifically,
we ask:
1. How and on what occasions are the key
business decisions of projects made?
2. How are the project stakeholders involved in
the project’s business decisions?
We will illustrate the business aspects of projects
through examples from three empirical studies.
The scope is delimited to the perspective of the
project contractor (i.e., the company designing
and delivering projects for customers) and its
project network, including subcontractors, com-
ponent suppliers, and other partners. Although the
customer’s viewpoint is not directly covered,
many of the contractor’s business decisions
reflect, to some degree, the customer’s viewpoint.
Further research on investors’ and other network
partners’ viewpoints of business decisions is
recommended.
Our research is focused on component and
machine manufacturers, particularly in the
construction and mechanical engineering industry.
Thus, the attention is on technology-based projects
with medium complexity and some degree of
19
 20 Miia Martinsuo, Rami Sariola, and Lauri Vuorinen
repetitiveness. Among component manufacturers,
in particular, projects tend to involve multiple
stakeholders, and even if the components are not
especially complex, their integrated systems and
project networks are. Unique and high-complexity
projects, product development, organizational
changes, and IT projects are not covered; however,
the findings on organizationally relevant business
decisions made during the project life cycle may
also be valid for these contexts.
The remainder of the chapter is structured in
the following way. First, we explore the business
decisions that occur at the front end of delivery
projects and the roles that network partners play
in influencing these decisions. Second, we analyze
the management controls that require a project
to interact with its parent organization and
broader business environment during delivery
projects. Third, we investigate postproject
service use in connection with advanced technol-
ogies. We then propose a framework for the key
business decisions that occur over the life cycle of
a project, with our key message emphasizing
projects’ business linkages on three main levels:
customer relationships, organization, and business
networks. This chapter’s contribution focuses
on organizational project management as a multi-
level, multifirm issue where business decisions
challenge organizations to define, lead, and
control projects as vehicles for business and,
thereby, complement their view of projects as
vehicles for efficient problem solving.
Business Decisions at the Front
End of Projects
The Front End of Delivery Projects
and Early Decisions
The value generation of delivery projects is
highly influenced by the activities and decisions
made during the early phases of such projects.
The early phases of project development are
critical for engaging in innovative activities and
planning project execution in a manner that opti-
mizes value generation (Kolltveit & Grønhaug,
2004). Further, decisions about a project’s busi-
ness model and related pricing logics have already
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been made and justified by these early phases
(Kujala et al., 2010, 2011). A key component of
a project’s business model that is defined at
the front end of the project is the definition of
the project’s value proposition (Kujala et al.,
2010), which can be used as both a sales
argument and a differentiating competitive factor
for customers. The value proposition specifies
the supplier’s scope of activity and related value
in the customer’s process. Despite the importance
of these early phases, the value creation potential
at the front end of delivery projects has not yet
been sufficiently utilized (Kolltveit & Grönhaug,
2004).
Paying attention to stakeholders’ needs
(Kolltveit & Grønhaug, 2004) and listening to
customers’ expectations (Brady et al., 2005) are
clearly emphasized at the project front end.
Suppliers need to analyze stakeholders’ needs
and then to consider and consolidate the stake-
holders’ various value drivers and expectations
(Aaltonen, 2011). Earlier research has also drawn
attention to ways to formulate, assess, and modify
projects’ target benefits (Chih & Zwikael, 2015).
When companies move toward more complex
solutions, they must begin considering the possi-
ble value of services to complement their techno-
logical systems (Kujala et al., 2010, 2011) and the
option of delivering integrated solutions (Brady
et al., 2005), even during the beginning phases of
their projects. Figure 2.1 summarizes the key busi-
ness decision issues that must be addressed at the
front end of delivery projects. Although the life
cycle value of a project does, indeed, take shape
quite early, little research is concerned with
controlling the emergence of life cycle value
when defining, developing, and agreeing upon
the concept of the project deliverable.
Many project failures can be traced back to what
was done or not done at the front end. Selecting the
wrong concept at the front end may lead to strategic
failures. One such example is the Ciudad Real
Central Airport in Spain. The airport, located more
than 200 kilometers from the center of Madrid, was
intended to serve Madrid and the Andalusian coast
with the help of high-speed rail. This concept was
found to be overly optimistic and poorly planned.
It cost 1.1 billion euros, and the Ciudad Real Central
 The Business of Projects in Organizations 21

Compiling stakeholder Value proposition to

needs to specify the the customer
project goal

Possibility
Business model and
and decision
earning logic
to bid

Delivery model, to Formulating the target

optimize lifecycle value benefits

Figure 2.1. Summary of key business decisions at the front end of the project.

Customer
(investor)

Design → Decision-
making on materials

Main contractor Designers

Design → Suggestion
on materials and
products

Component
supplier

Figure 2.2. Illustration of the research setting in the construction project networks.

Airport, which opened in 2009, was closed after just
three years of operation due to low passenger
volumes (Brueckner & Picard, 2015). Clearly, this
project failed to properly consider customers’ and
stakeholders’ needs.
Example of Component Supplier’s
Position and Stakeholder Influence in
Decision-Making
We studied stakeholders’ activities and roles in
decision-making at the front end of construction
projects, particularly with regard to securing the
option to bid on and, consequently, win a contract.
Figure 2.2 illustrates a typical setting at the front
end of a construction project, in which the main
contractor engages in a project network with the
customer and designers to specify what is being
constructed and how. Component and material
suppliers enter this project network later, through
the contractor’s decision to subcontract. However,
suppliers have an interest in influencing decisions at
the front end of projects, since this allows them
to play a more central role in the project network.
This study featured interviews in three component
supplier firms in the construction industry,

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 22 Miia Martinsuo, Rami Sariola, and Lauri Vuorinen
interviews with designers, a conceptual and
questionnaire study with designers, and interviews
with contractor firms.
The study began with the perspective of construc-
tion component suppliers, to understand their value
opportunities and service prospects at the front end
of construction projects. One of the early findings
was that the suppliers’ personnel felt that they could
contribute at the front end of construction projects,
but that their role in the project network was
restricted by the proposals made by the designers
(i.e., architects and structural engineers). Unless the
suppliers’ components were directly proposed
by the designers, they had limited opportunities
to contribute. We became interested in how the
suppliers could increase their chances of becoming
preferred suppliers and, thus, increase their central-
ity in the project network.
As a consequence, we initiated a study among the
designers in order to understand their perspective of
the contractors’ decisions and material selections,
and their interactions with suppliers (Martinsuo &
Sariola, 2015). The findings indicated that designers
have a significant influence on contractors’
purchasing decisions, which supported our initial
assumption and earlier research (Yang et al.,
2011). Architects and structural engineers achieve
influence through design specifications (products
included in plans) and expertise (influencing the
main contractor and its supplier selection), which
the main contractors and customers use as guide-
lines in their decision-making. Based on this study,
we argue that suppliers can influence project deci-
sion making at the front end of construction projects
by marketing their products to designers more
effectively and enhancing their relationships with
designers.
The designer study was continued by develop-
ing two theoretical frameworks: one concerning
the enhancement of relationships between
suppliers and designers (Sariola & Martinsuo,
2015); and the other dealing with the factors that
could explain suppliers’ effective project market-
ing toward designers (Sariola & Martinsuo, 2014)
and testing the frameworks empirically with
a questionnaire (Sariola & Martinsuo, 2016).
In addition to identifying the key expectations of
designers toward suppliers, this research provides
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knowledge about designers’ behaviors during
specification work. In terms of managerial impli-
cations, the study suggests practical activities
for construction component suppliers to take
actions toward and with designers in a project
network. In particular, component suppliers
should actively engage with designers and should
develop their technical capability in order to
become trustworthy from the designers’ perspec-
tive. The research also encourages component sup-
pliers to collaborate with designers through, for
example, joint R&D, since designers experiencing
such cooperation are more committed to the sup-
plier relationship.
Regardless of the specifications and expertise of
a project’s designers, the main contractor may have
its own interests or preferred solutions, which can
affect decision making at the front end of construc-
tion projects. The main contractor holds a central
position in construction project networks, and
contractors are considered to be drivers of new
concepts in the construction industry (Bygballe
et al., 2010). It is argued that component suppliers
can make significant contributions to innovation,
but that this talent is wasted because suppliers are
rarely involved at the front end of construction
projects (Håkansson and Ingemansson, 2013;
Manley, 2008). For this reason, we carried out
a further study from the main contractor’s perspec-
tive, to discover experiences and practices related to
contractor–supplier relationships and suppliers’
innovation potential at the front end of construc-
tion projects. The results showed that contractors
perceive component suppliers to have innovation
potential and that suppliers are often sources of
construction innovations. However, the imple-
mentation of construction innovations requires
deeper relationships and cooperation between
suppliers and contractors. The problem is that
relationships in construction project networks
are largely transactional in nature (Bankvall
et al., 2010). The results of our study revealed
contractors’ and suppliers’ practices for enhan-
cing contractor–supplier relationships and
exploiting suppliers’ potential in construction
innovations. The majority of these practices
were informal, and interviewees highlighted the
importance of interpersonal interactions between

suppliers and contractors (Sariola, unpublished
data). These practices allow suppliers to influence
decision making at the front end of construction
projects through contractors. In the end, the
project customer is usually the one who makes
the final purchasing decisions based on the
recommendations of the designers and the
contractors.
Based on these studies, we determined that it
is not sufficient for a project’s front-end decision
making to understand the dyadic interactions
and relationships between two stakeholders.
Stakeholders are linked to one another, and they
have their own ways of influencing business
decision making and innovations at the front
end of projects. Thus, in order to understand
decision making at the front end of projects, we
need to model a comprehensive network of
stakeholders’ motives and interactions with other
stakeholders.
Business Decisions during Project
Execution
When a project reaches its implementation phase,
one of the main responsibilities of the project
manager is to ensure the project’s smooth progress,
i.e., control the project implementation. As projects
can be considered as vehicles for business, project
control should not be only about performance
assessment in light of the project’s immediate
goals. In addition to monitoring the achievement
of objectives, project control can seek to improve
these objectives and, thereby, increase or enhance
the business value of the project. The preliminary
results of an ongoing research study reveal how
project control can have a value-promoting dimen-
sion. Although the background of project control is
in assessing the project performance compared with
planned goals, we propose a movement toward pro-
ject control as a business-oriented- and value-
adding decision-making process.
Project Control during Implementation
The importance of monitoring and controlling
a project’s progress is evident in some form in
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The Business of Projects in Organizations 23
all project management standards (e.g., PMI,
2013), and efficient project control has also been
argued to promote project success (Liu, 2015).
In its most basic form, project control follows
a cybernetic approach, in which the progress of
a project is monitored against the values of some
predefined goal, and corrective actions are
performed if deviations occur. This cybernetic
control follows the control approach of a production
process. In project management, Earned Value
Analysis is an example of a practical control tool
that includes many elements of a cybernetic control
approach.
The main problem of a cybernetic control approach
is its focus on minimizing deviations from preestab-
lished objectives. However, in complex organizations,
including temporary organizations like projects, clear,
preestablished objectives may be absent, and frequent
changes are likely. Consequently, a more holistic
approach to control is required.
The goal of organizational control is to
encourage behavior that is “desirable to achieving
the organization’s objectives” (Cardinal et al.,
2010). Control is practiced by utilizing different
combinations of control modes and mechanisms
(Kirsch, 1997). Control modes refer to the
different groups into which control is divided,
such as: market, clan, and bureaucratic control
(Ouchi, 1979); or belief, boundary, diagnostic,
and interactive control systems (Simons, 1994).
There are numerous conceptualizations of organi-
zational control, but the different control modes
can typically be grouped into input, behavior,
outcome, clan, and self-control (Kirsch, 1997).
Within these different control modes, control
mechanisms are the practical methods by which
control is practiced (e.g., formal meetings, rules,
and plans).
There is a growing agreement that, instead of
a single control mechanism or mode, effective
project control requires a control package com-
prising several control mechanisms and modes.
Different antecedents, such as task characteristics
(Kirsch, 1996) and project manager and project
team characteristics (Kirsch et al., 2010) affect
the configuration of a control package. In addition,
a control package is not static, but reflects the
changes that take place throughout a project’s
 24 Miia Martinsuo, Rami Sariola, and Lauri Vuorinen
life cycle (Kirsch, 2004). It is also not sufficient
to limit the focus to the project manager as
a controller; instead, there are multiple stake-
holders, each controlling a project in different
ways (Kirsch et al., 2002; Soh et al., 2011).
Business Aspects of Project Control
The more holistic control studies follow organiza-
tional control theories and tend to focus, at least
implicitly, on the “iron triangle” of the cost, time,
and scope objectives of a project. These basic
measures of project success have largely been
supplemented with measures of customer benefits,
business benefits, and learning (e.g., Shenhar
et al., 2001). Consequently, a few project control
studies have followed a broader approach to pro-
ject objectives, including, for instance, applica-
tions of a balanced scorecard for project business
(Norrie & Walker, 2004), and project health
checks (Jaafari, 2007).
When projects become more complex and uncer-
tain, simple forms of control are not sufficient.
Several studies have analyzed project control in
complex projects. Their primary finding has been
the central role of social or clan control (e.g., Chua
et al., 2012; Kirsch, 2004, Liu, 2015). This finding
has been illustrated, in particular, in relation to
the uncertainties of complex projects, hindering
the ability to define clear project objectives (e.g.,
Chua et al., 2012). In addition, there is evidence
of interactions among different control modes (i.e.,
a control package) and an emphasis on not utilizing
behavioral control in complex projects (Liu et al.,
2014). Complex projects can include complex
networks of stakeholders, each of which may try
to control the project in a different way (Soh et al.,
2011; Martinsuo et al., 2010). In particular, the
customer of a project can control the organization
of the project’s delivery and initiate project
changes. Such changes emphasize the need for con-
trol ambidexterity, or the ability to simultaneously
ensure smooth project progress and remain flexible
enough to consider changes (Tiwana, 2010).
Project control should not be only about perfor-
mance assessment in light of a project’s immediate
goals. In addition to delivering a project following
the project plan, a project team could actively work
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toward increasing the project’s delivered life cycle
value. This includes, for instance, educating the
customer on the use of the solution, its performance
enhancement and upgrade possibilities, and justify-
ing the need to combine tangible project delivery
with value-adding service elements. Here, many
business-oriented decisions are made, to optimize
the value of the delivered solution.
Further, it is not sufficient for an organization
to control the progress of its individual projects
separately. Instead, control practices are also
required at the project portfolio and organizational
levels, to achieve synergies across different
projects and, thereby, impacting the project sup-
plier’s business more broadly. Müller et al. (2008)
have analyzed focal project portfolio management
(PPM) activities (i.e., portfolio selection, portfolio
reporting, and portfolio decision making) as
control mechanisms. They demonstrate how
efficient portfolio control can improve the PPM
performance. An earlier, related study reported
that single project-level activities can also pro-
mote PPM effectiveness (Martinsuo & Lehtonen,
2007). Control is also required to manage the
numerous and simultaneous projects implemented
by project-based organizations (PBOs) or multi-
project organizations (Canonico & Söderlund,
2010).
The discussion above has covered many of the
elements of complex project environments and their
effects on project control. Figure 2.3. summarizes
these effects and the different levels of project
control.
Example of Business-Oriented Project
Control in Different Degrees of Complexity
Through a larger research program, we gained
access to study project control in a large engineering
company. This engineering company (hereafter,
EngineeringCo) offers its customers both standard
and tailored solutions, with the latter being imple-
mented as delivery projects. These delivery projects
include both tangible, physical goods (i.e., machin-
ery) and intangible elements (i.e., services). Two
separate case studies were designed, which focused
on life-cycle-oriented project control and project
control practices in different delivery projects.
 The Business of Projects in Organizations 25

Multiple projects From ensuring to promoting;

Controlling the project business of an business benefits
organization in addition to single projects:
controlling a PBO or a project portfolio
Moving from ensuring progress to promoting
lifecycle value: additional benefits for both the
delivery organization and the project client
Defining goals and tolerating uncertainty and
ill-defined objectives: particularly inclusion of
social and clan control
Ensuring progress according to project plans:
possibly even with cybernetic control
elements

Single project Iron triangle and plan

compliance
Figure 2.3. Business issues in project control at the different levels of the PBO.

Warranty period: how is the

promised performance level
guaranteed and how is work
divided regarding possible
product malfunctions and failures

Postproject service offerings: what does the project-based

firm offer, who are the other service providers, what do the
customers need, and what is the competition in services

Asset and capacity ownership: who owns and operates the

asset and/or capacity, what is the business model, and how
are responsibilities shared between the PBF and customer

New project opportunity identification: what new projects

can emerge either through in this specific customer
relationship, or on the basis of a reference from this project, or
reputation

Figure 2.4. Summary of key business decision issues in the postproject phase.

The results, first, demonstrated how
EngineeringCo promoted additional life-cycle
value in project solutions for its customers.
In particular, the company combined the achieve-
ments of the agreed-upon project plans (the lower
elements of Figure 2.4) with added life cycle
value for the project customer and, consequently,
the project supplier (the upper elements of
Figure 2.4). In practice, the promotion of
additional life cycle value was achieved through
sales argumentation, negotiation, and contract
structures (e.g., leasing vs. capital investments).
One of the main difficulties of considering the life
cycles of delivery projects was EngineeringCo’s
organizational structure. Historically, the com-
pany had involved a variety of organizational
functions to managing project deliveries and
service solutions. In addition, significant effort
was required to convince the customers of the
feasibility of new contract structures (e.g., leasing
and performance-based pricing elements).
(Martinsuo & Vuorinen, 2015)
The second phase of the study focused on the
project control of three different delivery projects.

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 26 Miia Martinsuo, Rami Sariola, and Lauri Vuorinen
The projects varied in terms of size, interrelatedness
(i.e., structural complexity), and aspects of uncer-
tainty. The primary result was understanding the
project supplier’s tailored approach to project
control. In the simpler cases, EngineeringCo and,
particularly, the project manager, controlled
delivery projects primarily through output control
and self-control. As the size and uncertainty of
a delivery project increased, additional control was
required to actively solve problems and create
a shared understanding of project goals. This
additional control was practiced primarily as clan
control (Vuorinen & Martinsuo, 2016).
The previous discussion and the empirical studies
illustrate the need for an organizational approach to
project control. As Figure 2.3 illustrates, project
control should not be limited to the iron triangle
objectives of single projects; instead, the focus
should be on broader goals and benefits, as well as
on project portfolio and organizational levels.
In addition, organizations should acknowledge the
contextual nature of project control. As both the
literature and the empirical studies demonstrate,
different projects must be controlled in different
ways. Although organizational project management
models and rules can be designed, organizations
should acknowledge the requirements of control
contextuality. In addition, though different organi-
zational functions are typically responsible for
delivery projects and service deliveries, this can
prevent early promotion of life cycle value during
the initial phases of delivery projects. Thus, the
move from plan compliance toward a business-
oriented life cycle approach requires improved
intraorganizational collaboration.
Postproject Business Decisions
Services as Postproject Business
Companies delivering complex products and
systems to their customers often seek additional
business by offering services for the life cycle
of the product or system. Such services may
include the design, installation, training, use,
performance, maintenance, repair, upgrade, opti-
mization, modernization, and disposal of the sys-
tem (Artto et al., 2008; Oliva & Kallenberg, 2003).
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Such services enhance the efficiency and profit-
ability of the customer’s asset and business
processes. Competitive pressures are forcing
PBOs to supply differentiated, high-quality
services to complement their product-based offer-
ings (Hobday et al., 2005), and, in fact, PBOs have
been considered particularly suitable for produ-
cing service-enhanced solutions (Gann & Salter
2000).
Services are increasingly discussed in association
with project business (e.g., Brady et al., 2005;
Hobday et al., 2005; Artto et al., 2008; Wikström
et al., 2009), and they can assist in converting
a firm’s business logic from products to solutions.
However, integrating services into complex
solutions is frequently treated as a “packaging” or
integration task that precedes solution delivery
(Brady et al., 2005), assuming that products and
services have already been developed.
All phases of a project life cycle may include
services. Some preproject activities, such as feasi-
bility studies, design, consulting, and planning,
may be delivered as services. In addition, project
management and control and other project activ-
ities may take the form of services (Artto et al.,
2008). Extending the offering of PBOs, however,
most frequently deals with postproject activities
regarding the maintenance, performance, asset
sharing, upgrade, and disposal of the offered
system or solution (Artto et al., 2008; Kujala
et al., 2008). Services can influence the business
of PBOs in many ways throughout a project’s life
cycle: through customer entry, customer value,
competitive advantage, delivery efficiency,
service business, and innovation and learning
(Artto et al., 2008; Kujala et al., 2008). Despite
the multitude of business opportunities related to
services, services have only recently begun to
draw attention in project business research.
One of the key concerns for PBOs is maintaining
business continuity despite the temporary nature of
each project and the discontinuity between project
deliveries (Hadjikhani, 1996). Services can be
considered means to build continuity through
customer relationships and to engage in cocreation
activities over the life cycle of a project-based asset,
whether it is an IT system, a manufacturing equip-
ment or process, or an entire solution for long-term

capacity creation. The life cycle capacity of
a system or solution requires continuous mainte-
nance and care, occasional upgrades, and eventual
disposal, all of which may be highly relevant to the
continuous business of a PBO (e.g., Kujala et al.,
2013).
The Back End of Delivery Projects
and Its Business Potential
Earlier research acknowledges four main domains
in which postproject business decisions signifi-
cantly concern the PBO: the warranty period,
service offerings, asset ownership, and new pro-
ject opportunities. Even if a PBO decides not to
build long-term relationships with its customers
following project delivery, it must still consider
these business issues. In particular, an external
third-party company may be required for these
postproject services, and this company may
request the PBO’s guidance (e.g., on product
specifications, spare parts, and maintenance
instructions) in order to offer its services.
Figure 2.4. summarizes the key business decision
issues in the postproject phase.
The warranty period for a project’s main product
requires the contractor’s intense involvement, since
the responsibility for the product is still in the hands
of the PBO and the costs of product failures are
managed by the contractor. Performance guaran-
tees, warranties, limitations of liability, and securi-
ties are postproject business issues that should be
considered by top management (von Branconi &
Loch, 2004). These issues also play an important
role in the project contract: that is, failing to fulfill
the contract will result in sanctions.
The service offerings needed to complement the
delivered solution must typically be specified dur-
ing or before the project (Martinsuo & Lähdeaho,
2011), and service capacity must be set up. It is not
self-evident that the contractor will take charge of
services; this responsibility could also fall to an
external service firm or a competitor. Yet, a PBO
needs to have a clear strategy concerning this issue
in order to convert project-related service opportu-
nities into business value.
Some customers are interested in transferring the
responsibility for their capacity or operations to an
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The Business of Projects in Organizations 27
external partner. This implies a shift in ownership
and a change in relationship roles. For example,
a customer may desire the production capacity of
a certain tonnage and be willing to rent/lease this
capacity, but not to purchase the equipment or pro-
cesses. In such cases, the PBO needs to consider
whether it is willing to maintain ownership of the
product for a longer period of time or prefers to
search for alternative funding options (i.e., other
than direct sales). Alternatively, a customer may
want someone else to operate the process and offer
the tonnage, even if it agrees to purchase the equip-
ment and processes. In such a scenario, a PBO must
consider whether it wants to offer the service of
“operations” to the customer. Since there are exter-
nal firms that may also want to offer such services,
the PBO must decide whether it is in the business of
capacity and operations or whether it will allow an
external service provider to take on this role.
Another important aspect of postproject activities
relates to new project opportunities. A single custo-
mer could give rise to several opportunities, parti-
cularly if the customer is satisfied with the project
delivery. Repeat customers are typically considered
beneficial because, through each project, a PBO is
able to learn more about the customers’ ways of
working, and this learning makes working on the
succeeding projects easier. Another possibility is
that a project customer can be used as a referee in
future project proposals (e.g., Jalkala & Salminen,
2010). Since many large projects receive public
attention, even the media communication about
a project and its success or failure may be reflected
in forthcoming project requests. Thus, it is very
important for a PBO to identify and utilize
opportunities for references and positive media
attention in order to attract future projects.
A PBO’s reputation and good image are significant
parts of its competitiveness; yet, little research has
covered such issues.
Example of Services That Build Project
Business Continuity
We studied the ways in which the provision of
services complements machine manufacturers’ pro-
ject offerings and, in particular, these PBOs’ inter-
est in standardizing service-related processes and
 28 Miia Martinsuo, Rami Sariola, and Lauri Vuorinen
innovating business models for the services.
In particular, we inspected six manufacturing
firms’ current states in project-related services, col-
lected data from four software-based service provi-
ders involved with these kinds of manufacturers,
and examined three manufacturing firms’ postpro-
ject service deliveries in more depth. Where earlier
research has focused largely on the role of earnings
logic in service-related business models, we were
more concerned with the service delivery logic and
how it can be made more efficient.
The focus was on equipment and system manu-
facturers delivering high-technology, high-value,
complex solutions to their customers. Each deliv-
ery is unique and offered on a project basis, and
the firms operate on demanding, highly competi-
tive and international markets. Services have
become highly lucrative for these firms, not only
because of their customers’ increasing interest in
outsourcing noncore activities to trusted external
partners, but because novel remote technologies
have begun to enable providers to stay “in tune”
with their customers’ processes on a continuous
and efficient basis. When remote technologies are
used efficiently, systems providers can follow
the status and use of the delivered equipment
in real time and deliver services that meet their
customers’ need. (Martinsuo & Momeni, 2015;
Momeni & Martinsuo, 2015)
Even when remote technologies are already lar-
gely in place, both project suppliers and customers
must continue to work on service capacity.
Manufacturing firms are now increasing the oppor-
tunity to use remote monitoring to achieve various
business benefits for use by both customers and the
project suppliers’ own service development.
We studied the challenges experienced by both the
manufacturing firms and the software firms in uti-
lizing equipment life cycle data to activate services
and achieve customer cooperation continuity.
We found that the key challenges experienced by
the personnel involved four issues: revenue realiza-
tion (moving from “freemiums” to cost-based,
added-value services), the processes of using and
integrating equipment data into service solutions,
data security, and data ownership (Ocaña Flores &
Martinsuo, 2015). Services follow a different
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business logic than equipment-related projects; for
example, there may be a service agreement or
service-level agreement based on monthly fees.
Thus, compared with project delivery relationships,
service relationships with customers must be
perceived and managed in new ways. Artto et al.
(2016) also have recently proposed that the value
creation achieved during business operations needs
to be considered in a new way and possibly through
multiple alternative scenarios, since this value crea-
tion involves multiple organizations, each with
unique needs.
One of the goals of the manufacturing firms
was to learn how to make service delivery more
efficient and standardized across different types
of customer contexts. We found that some of the
services were rather reactive (i.e., they emerged
on the basis of direct customer requests for
problem solutions or corrections), while others
were proactive (i.e., they developed based on
the project supplier’s insight into and anticipation
of customers’ value potential and needs). All of
the companies exhibited high variation in service
delivery, and all experienced challenges. Many of
the interviewees noted that, while many of the
back-office activities in service delivery could be
standardized, it was more difficult to forecast or
standardize the customer interface of the identifi-
cation of real customer need, due to the very
different contexts of customers’ operations.
(Poikonen et al., 2015)
These examples highlight the connection
between the contractor’s project business and
the customer’s continuous operations, as well as
the possible role of technology-enhanced ser-
vices in the contractor–customer relationship.
New kinds of challenges emerge when a PBO
adopts services as part of its business. Not all
customers are ready for such a transformation;
however, at the same time, many customers seek
to maintain their focus on their core business.
Indeed, postproject activities include crucial
business decisions, some of which are highly
strategic. The issue of “what business we are
in” concerns the mission of the firm and can
also be changed if the service market begins to
offer attractive business possibilities.
 The Business of Projects in Organizations 29

Conclusions: Life-Cycle View of Project relationship. These business decisions challenge

Business
This chapter has been concerned with the business
of projects, particularly over the life cycles of
single projects. The first research question inquired
into the ways and occasions for making key busi-
ness decisions in projects. We have explored the
business-defining events that occur over the project
life cycle and have shown several examples from
our empirical studies, particularly in construction
and engineering projects. Figure 2.5. summarizes
the business decisions of projects in the different
life cycle phases. The contractor’s viewpoint has
been emphasized.
The majority of previous research has centered
on projects’ operative decisions: project resourcing,
start, review, and control events, and changes.
We have shown that the business of projects deals
with a firm’s ability to bid on a project, to define and
reach benefits and value related to the project, and
to achieve a profitable and sustainable customer
project sponsors to “do the right things” in delivery
project contexts. Even if PPM research does not
concern delivery projects, delivery projects must
consider key decision events as opportunities for
business impact.
The second research question asked how the
project stakeholders are involved in the project’s
business decisions. We have demonstrated that
project-related business decisions, particularly at
the front end and back end of a project require
continuous customer cooperation and stakeholder
involvement. It is not only the project network that
needs to be considered at the front end, but also the
network involved in the operations of the project
product. We have also shown how various third
parties engage with the project network: for exam-
ple, designers may play an important role in promot-
ing certain project decisions; component suppliers
may seek to enhance their network centrality in
order to become favored partners for forthcoming
projects; and contractors may need to consider their

Business decisions over the Supplier’s Customer’s

project’s extended lifecycle perspective perspective
Preproject activities
• Possibility and decision to bid
• Compiling stakeholder needs Marketing Ideation and
for the goal and sales of preparation of
• Value proposition delivery investment
• Business model project project
• Target benefits Negotiations
• Delivery model
Project execution
• Controlling the business
objectives Design Organizing,
• Promoting lifecycle value and managing,
• Tolerating and managing delivery procurement
uncertainty
• Ensuring progress Planning and control

Postproject activities
• Warranty: guarantee for
performance level
Product Product
• Service offerings support use
• Ownership of asset
• New project opportunities Business
cooperation

Figure 2.5. Summary of business decisions over the project life cycle.

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 30 Miia Martinsuo, Rami Sariola, and Lauri Vuorinen
own network positions when moving toward ser-
vices or operation partners.
We have also shown that, during implementa-
tion, project control may take on an interactive
business nature, particularly in projects with high
degrees of complexity or uncertainty. When
projects pursue the delivery of life-cycle value,
project control cannot be “isolated” to the project
organization; instead, it must span the boundaries
of all involved organizations, possibly at different
levels. Thus, when multiple stakeholders are
involved, negotiations and justifications of
decisions may continue throughout project imple-
mentation, and uncertainties may lead to new
changes. These findings encourage project con-
tractors to consider how they can build different
levels of business decisions and different degrees
of complexity into their project models in order
to govern project operations effectively.
Summary
This chapter has developed the foundations for
making sound business decisions in the different
phases of the project’s life cycle. We have shown
that the most relevant business decisions not
only span across organizational levels, but they
cross the boundaries of firms and organizations
involved in the project delivery. Organizational
project management, therefore, needs frameworks
and practices that enable real-time communica-
tion and control at the different levels of the
organization, promote a seamless cooperation
between contractors and customers, and take the
stakeholders’ diverse and evolving needs into
account in the business networks with different
degrees of complexity. We have mapped the
critical business decisions over the project’s life
cycle and demonstrated that they complement
ordinary technical decisions, thereby encouraging
the project sponsors to take a strategic business
role in their management task.
Our empirical designs were delimited to deliv-
ery project contexts with an inherent multiproject
setting, i.e., companies having an interest in
implementing projects repetitively and multiple
projects simultaneously. The focus was on the
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contractor’s viewpoint, but linkages to customers,
component suppliers and third-party designers
also were covered to some degree. Even if the
investor’s perspective, and the perspective of
change and IT projects, or megaprojects were
not covered, many of our ideas may apply to
them, too. More research is suggested, particu-
larly to cover the customer’s or investor’s per-
spective to key business decisions, to map the
particularities concerning the multiproject con-
text, and to explore the emergence of business
in the project network more broadly when stake-
holders possess competing and complementary
business interests.
Acknowledgments
This research has been conducted as part of
DIMECC’s Future Industrial Services (FutIS)
research program and the Service Solutions for Fleet
Management (S4Fleet) research program funded by
the Finnish Technology and Innovation Agency
Tekes, companies and research institutes, and coordi-
nated by DIMECC. We gratefully acknowledge their
support in this study. We also thank the companies
that have participated in the case examples of this
study.
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 CHAPTER
3
Strategic OPM
Why Companies Need to Adopt a Strategic
Approach to Project Management
VERED HOLZMANN, AARON SHENHAR, and JOCA
STEFANOVIC
Introduction
Companies typically implement strategy through
the initiation and execution of an array of projects,
which they select to achieve the organization’s
long-term goals. Each of these projects is initiated
to create unique products, services, or processes or
to provide improvements in existing ones.
Moreover, companies typically initiate interrelated
projects to create new value that could not be
achieved by a single project but is attainable by
the synergetic effect that is generated by the inte-
gration of multiple projects (Cooke-Davies, 2004;
Cooke-Davies et al., 2009; Aubry & Hobbs, 2011).
In a paradoxical way, however, since the estab-
lishment of project management as a formal dis-
cipline, companies have focused primarily on the
operational aspects, namely, on executing pro-
cesses in the most efficient way. Yet, many sur-
veys show that most projects do not meet their
expected goals. For example, the Standish Group
study shows that over 70 percent of projects were
total or partial failures, failing to deliver on time,
budget, or specifications (Hastie & Wojewoda,
2015). Further, even among the projects that
successfully met their efficiency goals, many did
not achieve the expected business results for their
parent companies. Therefore, it appears that the
classical and traditional project management pro-
cesses and tools are no longer sufficient for guar-
anteeing modern project success (Jugdev
& Müller, 2005; Williams, 2005).
The strategic approach to project management
suggests that while a project should be managed
efficiently, it should also be managed effectively
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and strategically, to be considered successful.
Efficiency is related to the operational management
of a project that results in meeting the schedule,
budget, and specifications. Effectiveness is related
to the achievement of business goals and objectives,
and to customer satisfaction. Thus, the effective
management of a project requires an alignment
with the environment, adjustments of tasks and
responsibilities, and purposeful change manage-
ment throughout the project lifecycle. In addition
to the efficient management of a project, which guar-
antees it is performed as planned, effective manage-
ment of a project must guarantee it generates value
to the customer and users. Strategic management
of a project takes these two aspects as necessary
conditions for success. Strategic management of
a project considers the project’s service and contribu-
tion to the company, and is achieved through the
appropriate management style, integration with
other projects executed by the company, and the
synergetic value they generate for the organization.
This is not, however, the traditional way in which
projects are typically managed. All this requires
change.
Yet, this change is not obvious. Without the
active involvement of an organization in the way it
runs its projects, one cannot expect project
managers to take the initiative of running their
projects in a strategic way. Thus, a proactive
approach by the organization is required in order
to turn its projects into strategic activities. This is
what we call Strategic Organizational Project
Management (SOPM).
This chapter is focused on studying the strategic
aspects of managing projects and their relation to
33
 34 Vered Holzmann, Aaron Shenhar, and Joca Stefanovic
business success. We explore first the relationship
between building a Strategic Focus (SF) in a
project, together with additional aspects such as
Inspirational Leadership (IL) and Operational
Excellence (OE), and their relation to project suc-
cess. This provides the basis for assessing the stra-
tegic maturity of project management. We intend to
show that greater strategic focus in project manage-
ment is associated with better project and business
success. Once this proposition is established, we
make a case urging organizations to establish their
SOPM environments and provide recommendations
on how to do that.
Strategic Project Management Maturity
Expanding on previous research on strategy in
project management (Jugdev & Müller, 2005;
Cooke-Davies et al., 2009; Patanakul & Shenhar,
2012; Martinsuo & Killen, 2014; Too & Weaver,
2014), we embarked on questions about the orga-
nizational strategic value of projects, its recogni-
tion, and consequences on project management
style. We present here evidence that when projects
of high-strategic value are recognized as such,
they are managed differently from other projects.
In particular, we show that there are practices,
behaviors, and considerations in project manage-
ment that can be associated with strategy imple-
mentation, and that strategy-related behavior in
a project helps improve project and organizational
success. We also discuss other conditions that
influence this relationship.
We define a Strategic Project Management
Maturity (SPMM) model at the project level,
which consists of three dimensions: operational
excellence, inspirational leadership, and strategic
focus (see Figure 3.1). Operational Excellence
refers to the extent to which project management
activities, such as planning, execution, monitor-
ing, and control, focus on completing the project
within time, budget, and specification require-
ments. A high level of OE indicates that processes
were carried out according to the standard
guidelines (such as the Project Management
Body of Knowledge, PMBOK 2013) and there
were no major operational challenges recorded.
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High
Strategic Focus
Current Maturity Models
Low
Low High
Lo ip
sh
Operational Excellence
w
er
ad
Hi l Le
na
gh
tio
ra
pi
s
In
Figure 3.1. Strategic project management maturity.
Inspirational Leadership refers to the ability of
a project manager to inspire the project team,
induce team bonding, and ensure team effective-
ness to align all project stakeholders with the
accomplishment of the project’s goals and objec-
tives.A high level of IL indicates that the project
manager has a clear vision that he shares with the
team, and that the team members share values,
symbols, social activities, and attitudes, and they
are motivated to contribute to the project’s suc-
cess. Strategic Focus refers to the management
style used and its implication on value creation,
as well as top management support for efforts to
integrate the project with other projects contribut-
ing to strategic value creation for the company.
A high level of SF indicates that project manage-
ment was aware of the strategic value of the
project and acted upon it by, for example, giving
business results ultimate precedence over sche-
dule and budget or displaying other characteristic
behaviors related to project strategy formulation
and execution.
A high level of achievements in the SPMM
model vectors enables the creation of strategic
value, which is the project’s potential contribution
to long-term organizational goals. This strategic
value builds on a combination of efficiency,
effectiveness, and strategy. Hence, strategic value
in project management might result from one or
more of the following aspects. First, it might be
the outcome of a single project that is initiated to

improve competitive advantage through develop-
ment of new products, services, or processes
(Longman & Mullins, 2004; Pinto, 2007; Artto
et al., 2008; Patanakul & Shenhar, 2012). Second,
it might derive from a strategic managerial
approach, which is expressed in achieving busi-
ness results, such as profit, market share gain, or
public utility such as a new highway or tunnel (Mir
& Pinnington, 2014; Fernandes et al., 2015;
Badewi, 2016). Third, it might also stem from
the collective contribution of an array of projects
executed by the company. In this case, the value
attained by a network of projects is greater
than the sum of all individual projects and is inten-
sified by interrelations between projects (Thiry,
2002; Möller et al., 2005; Aubry et al., 2007;
Unger et al., 2012).
Empirical Examination
We examined the SPMM model in a large number
of projects to assess the relationships between the
three dimensions of the model and project success.
We used a mixed-methods approach in two phases.
We first carried out a qualitative case study of thirty-
five documented cases, and then, a quantitative
statistical analysis of 157 projects from different
industries.
The case study analysis was done according to
Eisenhard’s (1989; 1991) approach to building the-
ory from case studies and related methods (Shadish,
Cook, & Campbell, 2002; Yin, 1984). Our database
included 210 cases from different industries. These
projects were analyzed for project characteristics,
management style, and success. For the purpose of
the current study, we selected two subgroups of
projects – one that related to new product develop-
ment, potentially creating strategic positions in
markets and businesses, hence with strategic
goals; and the other to product upgrades, that is
for improving or upgrading an existing product,
hence with operational goals. All other cases were
eliminated. The final dataset included thirty-five
documented cases, for which we looked for within-
case, and cross-case patterns. Research findings
from the case study analysis phase helped formulate
the new SPMM model, with OE, IL, and SF as
elements.
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Strategic OPM 35
SF
High
Low High
OE
: Strategic goal projects
: Operational goal projects
Figure 3.2. Strategic vs. operational goal projects.
A follow-up survey was conducted with a group
of senior practicing project managers. The survey
tested the relationships between the SPMM
elements and project success. Respondents were
asked to provide data on finished projects from
their experience, based on a five-point Likert scale
of a set of scenarios that mostly resembled the
situation they experienced in the project on which
they reported. They were also asked to evaluate the
success of the project using several variables.
The questionnaire was distributed electronically to
experienced professionals in different areas in the
world.
Case Study Results
As shown in Figure 3.2, on the operational focus
dimension, about half the cases were ranked high
(i.e., the processes were carried out according to the
standard guidelines such as PMBOK and there were
no major operational problems recorded). The other
half were ranked low (i.e., standard processes were
not efficiently carried out, or not even recognized,
or there were major operational problems).
In contrast, on the strategic focus dimension, only
20 percent ranked high. In those projects, project
management activity was focused on attaining
business goals, or on displaying other characteristic
 36 Vered Holzmann, Aaron Shenhar, and Joca Stefanovic
behaviors related to project strategy formulation
and execution, such as giving business results
precedence over schedule and budget, and support-
ing integrative project management. Notably, the
correlation between the operational and strategic
dimensions was virtually zero. Thus, this supports
the notion that these two dimensions are
independent.
There were fourteen projects that had high
strategic importance to their organizations.
Of these, only five exhibited a high degree of
strategic focus. On the operational dimension,
about two-thirds of the projects ranked low.
Among the twenty-one projects whose goal was
not highly strategic, two-thirds ranked high on the
operational dimension, whereas only one was
assessed as having high strategic focus.
When calculating Pearson correlations
between the project goal (coded as highly strate-
gic or not) and the project management style
dimensions, the only significant positive correla-
tion was found between the project goal and the
strategic dimension of project management style.
This suggests that a strategic approach is present
more often in projects whose strategic value is
recognized.
It seems that organizations know how to distin-
guish between projects with operational goals and
those with strategic goals. It is much less clear,
however, whether this recognition is realized in
the actual practices of their project management
approaches. Dealing with strategy needs in these
studied projects seems to be mostly reduced to an
operational approach, under the assumption that
aligning initial project goals with organizational
strategy and just maintaining the project within
the triple constraint would be sufficient to achieve
the organizational strategic goals. In this view,
strategy-related behaviors are transformed into
a traditional operational behavior. In fact, most
of the analyzed case studies did not document
any strategic elements in their project manage-
ment styles. It seems that this limited approach
may only work for projects with operational
goals and/or low uncertainty.
For projects of strategic significance, especially
those where uncertainty is high, neglecting the
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strategic aspects and reducing project strategy to
operational efficiency may have an adverse effect.
Generally, there may be a potential conflict between
the strategic long-term goals and the operational
short-term goals. However, it is often not even
recognized as a dilemma, which requires making
trade-off decisions. Therefore, such dilemmas are
rarely documented and articulated.
In a wider sense, applying the concept of pro-
ject strategy and the strategic extent with which
projects are run requires, in addition to having
project goals aligned with business strategy, pro-
ject execution to include conscious and constant
reevaluation of needs, competitiveness, and mar-
ket conditions and aligning them with the opera-
tional decisions. Of particular importance is the
concept of strategic focus, which means that pro-
ject teams constantly keep an eye on building and
updating the strategic activities needed to achieve
the highest competitive advantage and the best
value from the project (Patanakul & Shenhar,
2012). Looking at projects as strategic business-
related processes involves nurturing ongoing
strategic behaviors as part of a strategic project
management style. The approach was recently
named Strategic Project Leadership (Shenhar;
2004, 2015). The difference between this view,
and the view almost invariably identified by our
studied cases, is significant.
Our case study analysis also indicates a positive
relationship between the strategic dimension of
the project management style and important
components of project success. When considering
project success as a multidimensional strategic
concept (Shenhar et al., 2001), our study found
in particular the preliminary indication for
a connection between the strategic behavior and
the dimension of preparation for the future. This
suggests that benefits created by a project typi-
cally outlive the project’s completion date and
may, in fact, relate to the product’s success
throughout its lifecycle.
As mentioned in the introduction, the qualitative
analysis part of our study served as a preliminary
theory-building step, and as an introduction to
the second, quantitative, phase, which is discussed
below.
 Strategic OPM 37

Number of Employees Location

25 60

50
20
40

Percent
30
Percent

15
20
10
10

0
5
Un W Ca Ea Am Ch In As Af Au
ite es na st er in di ia ric st
te er a a -o a ra
d rn da n ica lia
0 St Eu s th
at Eu -O er
es ro ro
pe pe th
<5

50

25

15

50
er
0–

00

00
0

–2

+
–5
50

15
00

00
Location

0 Industrial Segment

12.5

10.0

7.5
Percent

5.0

2.5

0.0
Ad A C C C D E E E A H In In M P S T T F O E G T U
ve uto ons ons ons efe -co ner nte ero eal for sur an har oftw ele rav ina the duc ove ran tilit
rti mo tru ul . e ns mm gy rta sp th m
. an ufa m ar com el nc r at rn sp y
si t e in a C a i al i on m ort
ng bile ctio ing lec er
ce m ce ar tec ce ctur ceu e m se en
n tro en e hn in
ni t ol g tica rv
ic
t
cs og l es
y

Figure 3.3. Organizational demographics.

Quantitative Survey Results
During the survey phase, we attempted to collect data
from 233 projects in three major areas: project man-
agement style, project success, and demographics.
Data were statistically analyzed with SPSS,
LISREL, and Excel. Overall, we received 186
(80 percent) valid responses, and most of the respon-
dents also requested and received the study’s feed-
back, which consisted of their individual ratings,
compared with the entire database scale averages.
Our demographical analysis screening required
using responses from managers who had been on
the project for more than a year, and had spent more
than 60 percent of their time on the project, leaving
157 cases that met these criteria for further analysis.
The data were collected from the research website
through PMI website links, or by answers to
a solicitation email, or from a major university’s
advanced project management course students.
Respondents came from a diverse sample of com-
pany sizes, industry segments, and countries
(Figure 3.3).
For the major part of the study, we used the
SPMM assessment tool, based on assessing the
project management style according to three
dimensions:
• Operational Excellence. How well is the project
managed efficiently and to what extent is it
expected to meet time, cost, and requirements
goals?

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 38 Vered Holzmann, Aaron Shenhar, and Joca Stefanovic
5 • Teamwork Effectiveness. To what extent did the
4 fillment and growth, as well as team energy and
3
2
1
0 four of five-level Likert-scale variables, ranging
Operational Strategic Inspired
Excellence Focus Leadership
Figure 3.4. SPMM dimensions’ means.
• Strategic Focus. How well is the project focused
on achieving business results and maximizing the
value of its outcome?
• Inspirational Leadership. How well is the pro-
ject building team spirit and focusing on the peo-
ple side of leadership?
Each dimension was assessed using between four
and five of five-level Likert-scale variables describ-
ing typical scenarios. Respondents were asked to
select the scenario that resembled their situation the
most. An analysis of the database revealed that the
SPMM scales’ means (Figure 3.4) were as follows:
Operational excellence received the highest score of
2.67 (out of 5), followed by strategic focus with
a score of 2.33, and inspiring leadership with the
lowest score of 2.05.
The last part of the survey assessed the project’s
success using the five success criteria as suggested
by Shenhar et al. (2001), as well as overall assess-
ment of project success. These dimensions
included:
• Project Efficiency. To what extent did the project
meet its time and cost goals?
• Customer Satisfaction. To what extent did the
product meet customer’s expectations and
satisfaction? And did it improve customer’s
performance?
• Business Success. To what extent did the project
contribute to business and organizational success,
profitability, return on investment, and market
share?
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project contribute to teamwork effectiveness, ful-
loyalty?
• Future Prospects. To what extent did the project
contribute to the creation of new businesses or
products, new markets, or new capabilities?
• Overall Success. To what extent was the project
a great success?
For each dimension we used between two and
from strongly agree to strongly disagree. We then
calculated the correlation between the strategic
maturity dimensions and the various dimensions of
project success.
Correlation analysis revealed significant
correlations at the 1 percent level, and some at
the 5 percent level among SPMM and project
success scales (Table 3.1). For example, team-
work effectiveness was correlated with all other
project success dimensions, suggesting that team-
work success goes hand in hand with other aspects
of project success.
The significant correlation of the three SPMM
dimensions imply that they are associated with
and contribute to the project’s strategic value,
which is expressed in the contribution to long-
term organizational goals. The identified signifi-
cant SPMM scale associations of project success
scales are described in Figure 3.5., and summar-
ized as follows:
• Operational excellence is associated with project
efficiency.
• Strategic focus is associated with business success.
• Strategic focus is associated with customer
satisfaction.
• Strategic focus is associated with future prospects.
• Strategic focus is associated with overall success.
• Inspiring leadership is associated with teamwork
effectiveness.
Discussion
Overall, we found that in most projects, goals could
typically be identified as either operational or strate-
gic. This demonstrated awareness to what projects
 Strategic OPM 39

Table 3.1 Correlations of Maturity with Success Dimensions

Teamwork Effectiveness (a)

Customer Satisfaction (a)

Business Success (a)

Future Prospects (a)

Success – Overall
Efficiency (a)
OE (a)

SF (a)

IL (a)
Correlations

OE (a) 1 0.561 0.551 0.191 0.317 0.198 0.210 0.226 0.318

SF (a) 0.561 1 0.654 0.138 0.387 0.327 0.269 0.406 0.361
IL (a) 0.551 0.654 1 0.038 0.297 0.248 0.362 0.351 0.335
Efficiency (a) 0.191 0.138 0.038 1 0.432 0.370 0.452 0.237 0.562
Customer satisfaction (a) 0.317 0.387 0.297 0.432 1 0.643 0.592 0.485 0.719
Business success (a) 0.198 0.327 0.248 0.37 0.643 1 0.467 0.573 0.618
Teamwork effectiveness (a) 0.21 0.269 0.362 0.452 0.592 0.647 1 0.390 0.638
Future prospects (a) 0.226 0.406 0.351 0.237 0.485 0.573 0.390 1 0.427
Success – overall 0.318 0.361 0.335 0.562 0.719 0.618 0.638 0.427 1

Project Success

Efficiency

Project Management Customer Satisfaction

Operational Excellence
Business Success
Strategic Focus
Teamwork Effectiveness
Inspirational Leadership
Future Prospects

Success, overall

Figure 3.5. Maturity dimensions and their impact on project strategic value.

mean to their organizations, and what the expected
project outcomes are. In addition, most respondents
were able to identify and describe their firm’s strategy,
and explain how it was connected to their project
goals.
However, most of the project teams considered
project strategy to be simply an alignment of the
project’s operational goals with the firm’s strategy
by ensuring that the project’s triple constraint was in
agreement with the organizational goals. In these

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 40 Vered Holzmann, Aaron Shenhar, and Joca Stefanovic
cases, carrying out the company’s strategy was
reduced to essentially executing a project within
the specified triple constraint. Strategic focus was
generally not recognized, and usually there was no
strategic alignment in monitoring and controlling
activities.
In addition, no evidence was found to indicate
a clear organizational policy and guidelines that
required project teams to deal with strategy during
the project execution. Further, our case analysis
indicates that most projects are still managed
today in an operational manner. That is, a majority
of projects with high strategic values and almost all
projects with operational goals are managed oper-
ationally. This indicates that, in spite of the strategic
importance placed on projects, the traditional
approach still dominates the field.
While most project managers and organizations
recognize the strategic importance of their projects
and can distinguish between projects with opera-
tional goals and those with strategic goals, it is
much less clear, however, whether this recognition
materializes during the project execution process.
As mentioned, striving to achieve strategic goals
through projects is, in most cases, reduced to
aligning initial project goals with organizational
strategy and maintaining the project’s execution
within the triple constraint. In this way, strategy-
related behaviors are mostly expressed through
operational behaviors.
This approach may work for projects with short-
term operational goals. In these cases, it may be
possible to focus project management on opera-
tional excellence and still achieve successful project
outcomes. In projects of high-strategic importance,
however, explicit focus of the project’s strategic
goals is necessary, and neglecting it may have an
adverse effect on project success.
The larger-scale quantitative findings con-
firmed that project management styles may be
distinguished according to three dimensions:
operational excellence, inspiring leadership, and
strategic focus. Operational excellence measures
the degree to which a project manager manages
the project efficiently and keeps it within the
planned time and budget constraints. Inspiring
leadership relates to the project manager’s activity
to enable teamwork processes, team bonding, and
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team loyalty. Strategic focus measures the degree
to which a project is focused on executing its
intended business goals.
It should come as no surprise that operational
excellence predicts project efficiency. However,
operational excellence predicts neither of the
other project success dimensions. This suggests
that operational excellence will not translate to
customer satisfaction or business success. This find-
ing makes it necessary to focus attention to the other
project management maturity dimensions as well.
As we have seen, strategic focus seems to be
a key element in achieving customer satisfaction,
business success, future prospects, and overall
success. Essentially, all lasting post-project effects
are predicted by strategic focus.
Finally, since no evidence was found that compa-
nies institute a policy requiring their project teams to
focus their attention on strategy and business results
during project execution, this is a strong indication
that change is needed. The low level of maturity on
the strategic and leadership aspects indicates that,
from a strategic perspective, there is ample room for
improvement. Further, it also indicates that current
project managers are perhaps not equipped with the
necessary skills to lead projects for business results.
Organizations and companies must take the lead, as
suggested in the following section.
Implications: Toward Strategic
Organizational Project Management
The implications of our findings to management
are clear. Having project goals initially aligned
with business strategy and hoping that this will
guarantee achieving the project’s strategic goals is
not enough. Instead, a conscious, ongoing evalua-
tion of a project’s activities against its strategic
goals is necessary. Similarly, just managing the
project’s operations, without focusing on the
integration between projects, is not enough. Here,
too, a constant effort to improve the organizational
competitive advantage, to strategically manage the
project with top management support, and to benefit
from the network of projects is necessary.
All this requires proactive approach by organiza-
tions. Clearly, project managers on their own
 Strategic OPM 41

will not be able to make the change. Companies
must take the lead for investing in their
Organizational Project Management (Aubry et al.,
2007;Unger et al., 2012). Organizations need to
make a conscious effort to establish a project
management governance system (Muller, 2009)
that would install the standards, processes, tools,
and training that will move them from the tradi-
tional methods focused on timely delivery to strate-
gic methods focused on business results. This is not
a revolution, but an evolution. The previous pro-
cesses should remain for strengthening operational
efficiency, but these companies need to add the new
components indicated in our study – strategic focus
and inspiring leadership.
We thus believe that a new organizational
project management standard is needed. In
addition to the operationally focused approach,
strategy focus and inspiring leadership should
become new buzzwords. This approach should
find its way into project management curricula,
where new programs should be focused on busi-
ness goals achievement and value creation, as well
as developing project leaders, rather than just edu-
cating project managers.
Thus, we are talking about an overall strategic
approach to project management that will be imple-
mented top-down in a company. Table 3.2 describes
the new evolution from the traditional approach to
the strategic approach, as defined in Shenhar (2004,
2015). The evolution is characterized by adding
new elements to the traditional approach, not repla-
cing it. Therefore, the strategic approach is to
expand on existing practices.
To summarize, we believe that the governance
system of the new OPM would focus in the future

Table 3.2 The Evolution of OPM from Traditional PM to Strategic PM

Strategic Project Leadership (Adding to

Factor Traditional PM Traditional)

Project’s objective Create, deliver a product or service Create value, building and improving
business results
Project manager’s responsibility Get the job done – timely output Responsibility for business outcome
Mindset Operational Strategic, operational, leadership
Project’s focus Efficiency Effectiveness and efficiency
Success Meeting the “triple constraint” – time, Achieving multiple success dimensions,
budget, scope including customer satisfaction and
business outcomes
Style of management “one size fits all” Adapt to innovation – “one size does not fit
all”
Assumptions about projects Fixed, linear, certain Changing, nonlinear, uncertain, often
random
Project is defined by Scope, schedule, budget Business perspective, needs, and
opportunity; strategy, competitive
advantage; value; success criteria;
innovation type; scope, schedule,
budget, . . .
Planning One time, stick to plan, make corrections to Initial plan will change; need replanning
go back on track and adjustments. Rolling wave plans,
agility, if relevant
Project is reviewed for Progress: milestones, budget, schedule Needs, strategy, expectations, progress, . . .
Tools WBS, PERT, Gantt, budget, risk, . . . Multidimensional success, diamond of
innovation, strategy, spirit, competitive
maps, others, . . .
Human side HR mgmt., teams, conflict Leadership, vision, spirit, motivation

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 42 Vered Holzmann, Aaron Shenhar, and Joca Stefanovic
on implementing the following elements in the project
management processes of the organization:
• Projects should be seen as part of the strategic
business processes in organizations; their goals
should contribute to the business success of the
organization and not just meeting time, budget,
and performance goals.
• Projects should be managed strategically and ben-
efit from the organizational portfolio, including
interaction between projects, to create additional
value at the organization level.
• Project success should be defined early-on, to set
the upfront expectations from the project. It should
be assessed on several major dimensions such as
efficiency, customer satisfaction, team effective-
ness, business success, and preparing for the future.
• Project managers should be responsible for
achieving business results and other success
dimensions, and not just the triple constraint.
In addition, project sponsors and executives
should be made accountable.
• When managing a project, project teams need to
learn how to focus on the strategic and leadership
aspects of the project and not just on its opera-
tional efficiency. They need to develop a specific
project strategy and focus the team’s activity on
creating competitive advantage as well as on
organizational future prospects from the project.
• Project managers should be trained to become
better leaders and learn how to inspire their
teams by creating the right vision and instilling
the appropriate norms and motivation.
• Executives should learn to build strategic project
charters, and select projects based on their con-
tribution to the overall strategy of the
organization.
• Project reviews by top managers should include an
examination of the strategic progress of the pro-
jects, their expected success on all dimensions, and
their relevance in the market, given the changes
and dynamics in the competitive environment.
Further research is clearly needed. Since opera-
tional excellence is well studied at this time, new
research directions could be based on the strategic
focus and inspirational leadership dimensions. For
example, one may ask: Is strategic focus more
important for project success in high-uncertainty
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or high-technology projects than in low-tech pro-
jects? Is strategic management more important in
certain industries than in others? Is strategic focus
more important for projects with external versus
internal customers? And what role does inspira-
tional leadership play in the success of strategic
projects. Similarly, what are the best practices to
generate organizational value from a strategic
project?
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 CHAPTER
4
Strengthening the Connections
between Strategy and Organizational
Project Management
KAM JUGDEV
Introduction
It has often been said that hope is not a strategy and
that a wait-and-see attitude is not a plan. “Strategy
is the great work of the organization. In situations
of life or death, it is the Tao of survival or
extinction. Its study cannot be neglected” (Grant,
2016, p. 3).
This chapter provides a brief overview of the
Project Management Institute’s (PMI)
Organizational Project Management Maturity
Model (OPM3) standard. According to PMI’s web-
site, “A standard is a document, established by
consensus and approved by a recognized body,
which provides for common and repeated use,
rules, guidelines or characteristics for activities or
their results, aimed at the achievement of the
optimum degree of order in a given context”
(“What is a Standard?,” 2016). This is followed by
foundational concepts in strategic management to
highlight relevant frameworks and contributions
from select scholars in strategy – Robert Grant,
Michael Porter, Jay Barney, and Henry Mintzberg.
After that, the chapter discusses the importance
of linking the strategic management and OPM3
processes that span project, program, and portfolio
(PPP) management. Then, the chapter briefly
summarizes some limitations of the OPM3. The
chapter concludes with recommendations.
The purpose of this chapter is to help project
management researchers enhance their appreciation
of concepts from strategic management and under-
stand some of the limitations of OPM3. According
to PMI, the OPM3 model is a framework that
“defines knowledge, assessment and improvement
processes, based on Best Practices and Capabilities,
44
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to help organizations measure and mature their
portfolio, program, and project management prac-
tices” (Project Management Institute, 2013, p. 239).
The three elements of OPM3 include knowledge
of OPM3 best practices, assessing organizational
capabilities to identify areas for improvement, and
improving the organization accordingly. The OPM3
process is akin to Deming’s classic quality improve-
ment cycle, which covers planning, doing, check-
ing, and acting/adjusting. The OPM3 standard does
not discuss any of the classic strategic management
frameworks reviewed in this chapter. Instead, the
standard covers strategy narrowly, in terms of
execution versus the entire strategic management
process consisting of long-term goals, a deep under-
standing of the competitive environment and
appraisal of organizational resources, followed by
implementation and evaluation.
Whether in the context of an individual or orga-
nization, strategy involves achieving long-term
objectives (goals) (Grant, 2016). Similar to
a carpenter with a toolbox for different project
needs, strategists use different analytical tools for
different contexts. In the twentieth century, strategic
management evolved from a dogmatic focus on
strategic plans and financial goals to the breadth of
theories and frameworks in use. Strategy used to
be an explicit and directive approach; these days,
strategy is dynamic, multifaceted, and emergent.
Strategic management processes do not necessarily
lead to clear-cut answers as much as they help
organizations understand the complex and turbulent
internal and external environments within which
they exist so that they can make appropriate
decisions to remain profitable. The combination of
the industry view (the external market perspective)

and an organization’s internal perspective help us
understand the important question “why do firms
differ and how does it matter?” (Nelson, 1991,
p. 257).
The Importance of Theory in Strategic
Management and Project Management
Research is the “scholarly or scientific investigation
of inquiry” (Gioia & Pitre, 1990, p. 162) whereby
inquiry spans redevelopment in terms of concepts,
construct development, and empirical studies.
Theories are the cornerstones of research. It can
take decades for new perspectives to evolve into
theories. Incrementally, academics contribute new
knowledge to the vast body of knowledge by
“standing on the shoulders of giants in the field.”
In the well-established academic management
domain, five dominant theories include organiza-
tional theory, organizational learning that links
organizational theory to strategic management
theory, strategic management (further divided into
strategic management and resources/capabilities
theory), transaction-cost theory, and agency theory.
In this chapter, the focus is on strategic management
theories (Gonzalez, Castro, Bueno, & Gonzalez,
2001). The reason this is important is that theoreti-
cal perspectives in project management remain to
be developed. Second, research in project manage-
ment using strategic management theories is in its
infancy. Finally, although PMI provides a number
of standards for industry use, they are atheoretical.
Consequently, practitioners are encouraged to
develop a broader awareness of strategic manage-
ment academic theories and use a reflective lens
as they read and use the standards. Researchers
should focus their efforts on theoretically grounded
perspectives to help advance the field and continue
to use effective knowledge transfer/translation
whereby research models and findings are made
more relevant for practice (Rynes, Bartunek, &
Daft, 2001).
As an applied discipline, project management has
been used for centuries; however, relative to more
established fields with robust midrange and full-
fledged theories, project management is in its
infancy. “Most descriptive research on the
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Strengthening the Connections; Strategy & OPM 45
management of projects is relatively young and
suffers from a weak theoretical basis” (Engwall,
2003, p. 792). Söderlund (2011) adds that our
discipline has a narrow focus, lacks empirical
depth and lacks a theoretical basis. Admittedly,
these are harsh views, but it is important to
understand that by being critically constructive
and objective about our field, we have the opportu-
nity to develop theories in project management.
Research in project management is evolving.
Some of the emerging schools within project
management anchored in the established
domains and with the potential to evolve into
theories that are more robust include temporary
organizations, behavioral aspects, and critical
success factors (Jugdev, 2008). Schools of
thought are developing in project management
and include the “Optimization School, Factor
School, Contingency School, Behavior School,
Governance School, Relationship School and
Decision School” (Söderlund, 2011, p. 153).
A recently edited book on novel approaches to
OPM3 research supported the position that project
management goes beyond managing a single pro-
ject and that it involves relationships between
projects and the organization (Drouin, Müller, &
Sankaran, 2013).
It takes decades to develop theories. It is
incumbent on all of us to contribute to these efforts
because theories enable us to contribute to the body
of knowledge. Using sound theoretical foundations
will enhance the credibility of our research and
enable us to capitalize on valid and reliable instru-
ments, thereby improving our ability to enhance
the generalizability of our findings. One way that
we can do this is by drawing from research in
strategic management, to understand the relation-
ships between this domain and project management
in terms of alignment, portfolio and program
management, and governance (Drouin et al.,
2012). Collectively, we can strengthen the theoreti-
cal foundations of project management.
The Strategic Management Process
In the well-developed and theoretically grounded
strategic management field, approaches to strategy
 46 Kam Jugdev

Mission

Vision
(Objectives)

Internal Analysis S (Strengths) O (Opportunities) External Analysis

(Organization) W (Weaknesses) T (Threats) (Environment)

Strategic Choices

Strategic Implementation

Competitive Advantage

Figure 4.1. The strategic management process.

have involved exemplary contributions by many.
In this chapter, we focus on the contributions of
four strategy/economic professors – Robert Grant,
Michael Porter, Jay Barney, and Henry Mintzberg.
One approach to strategy, as popularized by Porter
is the Industry View. The Industry View is out-
wardly focused. The other approach to strategy, as
popularized by Barney, is the Resource-Based View
(RBV). The RBV is inwardly focused. Grant sup-
ports the approach whereby business strategy
involves looking inwardly and externally (Grant,
2016). Porter is also known for popularizing the
strengths, weaknesses, opportunities, and threats
(SWOT) analysis, Five Forces of Competitive
Advantage framework, and the value chain
(Porter, 1996). The SWOT analysis was originally
developed by Andrews (1980). Mintzberg is
renowned for his schools of thought on strategic
management, including the distinction between
deliberate and emergent strategies. The following
framework will help readers appreciate the main
concepts of this chapter.
As per Figure 4.1, organizations develop power-
ful mission and vision statements respectively to
convey what they do and what they aspire to be in
the future. These statements guide how they then
operationalize their intentions. Successful firms
have a mission, whereby they focus on their goals
over profitability and profitability ensues (Grant,
2016). When an organization has alignment
between its vision, mission and values, the leaders
can effectively balance short- and long-term goals.
An organization also develops value statements to
demonstrate its moral and social fiber, in other
words, its culture and behaviors. For example, the
fast food conglomerate McDonald’s espouses its
mission is to “be our customers’ favorite place and
way to eat and drink” (McDonald’s, n.d.).
McDonald’s also has a set of value statements and
the first one is that “we place the customer experi-
ence at the core of all we do” (McDonald’s, n.d.).
Organizations conduct internal and external
analyses to help them understand their internal
resources in the context of the marketplace. Based
on these analyses, organizations make strategic
choices on which initiatives to invest in. Strategic
choices lead to implementation practices. This pro-
cess helps firms focus on organizational resources
and initiatives that will add value, where the
measure of value is mainly in terms of profit
maximization (competitive advantage) for share-
holders – an essential stakeholder category.
Companies need to focus on shareholders to remain
viable. Successful organizations do not ignore other
stakeholders, but by taking a joint interest perspec-
tive, they strive to balance stakeholder interests. For

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example, many organizations also develop corpo-
rate social responsibility practices to reflect their
responsible relationships to society. In summary,
an organization uses the aforementioned framework
to develop and sustain a competitive advantage.
In the race to “win” in the marketplace, there
are degrees of competitive advantage. In the
1960s, Vince Lombardi, a legendary and successful
American football coach for the Green Bay Packers,
asked, “If winning isn’t everything, why do they
keep score?” (Lombardi, n.d.). Organizations that
are very slow to adapt to any change run the risk of
not surviving. These organizations are at a compe-
titive disadvantage. Organizations that adapt like
their competitors are “in the middle of the pack.”
These organizations are at competitive parity.
Although every organization aspires to lead the
pack, the majority are quite happy to maintain
a position in the race. Very few organizations
excel for the long term by capitalizing on their
resources and rapidly adapting to environmental
changes. Such enviable organizations in any indus-
try achieve a sustained competitive advantage.
These organizations lead the pack. A sustainable
competitive advantage is typically described as
one that an organization maintains for at least
five years (Hansen & Wernerfelt, 1989; Rouse &
Daellenbach, 1999; Rumelt, Schendel, & Teece,
1991). A competitive advantage involves being
nimble, innovative, adaptive, and creative.
In business strategy, success is primarily based on
winning in the marketplace (Grant, 2016).
More and more organizations are turning to
project management to enable them to be compe-
titive. Project management is a knowledge-based
discipline that also spans tools, techniques, and
practices. Project management can help corpora-
tions achieve their goals and deliver products and
services (Project Management Institute, 2013).
Historically, the perception was that strategy for-
mulation occurred at the senior levels of the
organization and, further down the hierarchy,
employees implemented strategy (Ansoff, 1965).
The perception was that project management was
an applied discipline practiced only at operational
levels of the firm. These days, it is important to
think more inclusively about strategic manage-
ment and more strategically about project
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Strengthening the Connections; Strategy & OPM 47
management. The image to keep in mind is that
of strategic management processes diffusing
throughout the organization. In this sense, strate-
gic management is not limited to the upper eche-
lons of the corporation as was the case in the past
(Ansoff, 1965). Further, project management
should be intricately linked to a firm’s strategic
directions and, in essence, diffuse upwards. Each
project, program, and portfolio (PPP) should
demonstrate a clear connection to the organiza-
tion’s mission and vision. Readers can also view
the organization as an intricate web of PPP,
whereby every PPP has a clear connection to the
organization’s strategy. Each PPP should demon-
strate the value (in quantifiable and tangible
terms) that it will generate for the organization.
Strategic management planning and implementa-
tion should involve staff at all levels of the
organization, especially since not all deliberate
strategies materialize and some strategies simply
emerge. Consequently, strategies become
a pattern of organizational actions and they
involve multiple players (Mintzberg & Quinn,
1996). When employees do not feel they are a part
of developing the strategic plan, especially when
they are instrumental in implementing the strategic
plan through initiatives and projects, there is a lack of
buy-in and commitment. The strategic and opera-
tional worlds of an organization mutually support
each other and, regardless of where strategic ideas
originate in the ranks of the organization, every-
one in the organization is involved in strategic
thinking. Going beyond the perspective that strat-
egy gives rise to new projects and projects are how
strategy can be implemented, project management
can be a source of new and emerging strategies for
the organization, and project management can
drive/enable strategies.
Strategic Management Perspectives
Different perspectives to strategic management
abound in the academic literature. Mintzberg’s
approach is one of crafting strategy while Grant’s
approach is more systematic and analytical.
Mintzberg cautions that organizations cannot pre-
dict the future, so strategy should be a fluid process
 48 Kam Jugdev
that involves intuition and spontaneity. Mintzberg
further indicates that strategy formulation and
implementation go hand in hand (Grant, 2016).
Grant’s strategy framework looks at the firm’s
goals and values, resources/capabilities, structure,
and systems in tandem with the industry environ-
ment (Grant, 2016). He explains that the elements
of a successful strategy include developing long-
term goals, understanding the competitive
environment, and critically appraising resources,
the combination of which are implemented in
a particular direction. Using the examples of
Lady Gaga and Apple Inc., Grant discusses
individual and organizational success in terms of
competitive advantage. His mini case studies help
readers relate to strategy in terms of individuals
and organizations. As Grant elaborates, Lady
Gaga has a laser-sharp focus on stardom (goal).
She is extremely aware of the industry and
what younger generations want to hear in terms
of music (environment). She capitalizes (exploits)
her talents (appraisal) and she continues to
reinvent herself with every performance
(implementation).
Mintzberg, Ahlstrad, and Lampel understood
the complexities of strategic management excep-
tionally well as described in their classic book –
Strategic Safari: A Guided Tour through the Wilds
of Strategic Management (1998). This book
describes the five Ps of strategy as: a plan, pattern,
position, perspective, or ploy. Essentially, strate-
gies can be deliberate or emergent. Deliberate
strategies are ones that an organization intends to
pursue and are subsequently followed. To offer an
example from the music scene, according to three
music enthusiasts (Jugdev, Jugdev, & Jugdev,
2016), Beyoncé uses a controlled and tightly
scripted, planned, and deliberate approach to her
persona. This approach has worked for her and
contributed to her success as both a singer and
actor. Deliberate strategies that are not fulfilled
are unrealized strategies. Strategies that emerge
are ones that were not intentional but still
evolved. To exemplify a deliberate strategy at
3M Company, years ago, an employee developed
a light adhesive. However, another employee later
found that the product was useful as an adhesive
on bookmarks to locate passages in his hymnal.
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Thus, the well-known Post-it came into use as an
emergent strategy. Thanks to 3M Company’s
bootlegging policy (used to secretly motivate
staff to be innovative), employees now spend
15 percent of their time on new ideas
(Swearingen & Bergfeld, 2008).
The Forbes top “30 Under 30” stars list includes
a number of artists, out of whom Taylor Swift,
Miley Cyrus, and Lady Gaga may be especially
memorable (Forbes, 2014). According to Jugdev,
Jugdev, and Jugdev (2016), Cyrus reinvented
herself in the transition from a Walt Disney
television teen peformer to an adult pop star, albeit
notoriously. Like Madonna, Lady Gaga continues
to reinvent herself outrageously with every
appearance. Taylor Swift successfully transi-
tioned from a country music singer to pop.
The Jugdevs describe Taylor Swift as a country
sweetheart who has been active on social media to
engage her fans and progressively transition from
country to pop. In contrast, they view Lady Gaga
as having made fast changes from one persona to
another. Similarly, they see Miley Cyrus as also
making fast and revolutionary changes, albeit with
tremendous shock value. From a competitive
advantage perspective, their assessment of Cyrus
is that she transitioned from her fictional Hannah
Montana television persona (which had a huge
tween following) to her musical output in the
2010s, which appeals to young adults. They view
this as a deliberate strategy that allows Cyrus to
maintain a competitive advantage by growing her
fan base.
Industry-View Frameworks for Strategic
Analyses
As organizations develop their business strate-
gies, they conduct analyses at the macroenviron-
mental, industry, and organizational levels
(Grant, 2016). Generally, macrofactors include
national/international economy (E), technology
(T), government and politics (P), the natural
environment (E), demographic structure (D), and
the social structure (S). Other acronyms used to
refer to these factors are DEPEST and PESTLE
(see http://pestleanalysis.com/what-is-pestle-
analysis/).

An industry refers to the firms that supply
a particular market. By analyzing the industry in
terms of customers, suppliers, and competitors,
firms can determine the industry’s attractiveness
and develop responsive strategies. Porter’s Five
Forces of Competition framework represents an
industry analysis (Porter, 2008). This framework is
an insightful microeconomic model on the rivalry
among firms. The framework considers the bargain-
ing power of suppliers and buyers as well as threats
from new supplier entrants and the threats of sub-
stitutes. Although the industry view helps assess
market conditions, it deemphasizes sources of
competitive advantage based on interfirm resource
differences. However, the five forces framework
assumes that the industry structure is stable when,
in fact, it is dynamic. For example, interorganiza-
tional competition can change the structure, as can
Schumpeterian forces, which refers to unpredict-
able revolutionary innovations. Some examples of
Schumpeterian changes include Apple’s iPhone and
iWatch. As Grant (2016) indicates, although
Porter’s five forces approach and SWOT analysis
are useful techniques, they are not strategy in and of
themselves.
On their own, each of the aforementioned frame-
works may not provide a complete or robust strate-
gic analysis. However, when these frameworks are
used in concert with each other, readers can develop
a deeper understanding of the internal and external
environment in which their organization competes.
This more holistic approach helps craft effective
strategies, especially when the industry-focused fra-
meworks are coupled with the RBV as discussed
next.
Resource-Based View Framework
for Strategic Analysis
As popularized by Jay Barney, the RBV is a theory
of sustainable competitive advantage. The RBV is
an analytical tool (Peteraf & Barney, 2003). The
resource-level RBV complements the externally
focused five forces model on industry attractive-
ness. Both analytical tools are appropriate for
different types of empirical research. According to
the RBV, an organization’s competitive advantage
stems from its resources. In broad terms,
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Strengthening the Connections; Strategy & OPM 49
organizational resources are bundles of tangible or
intangible assets, where assets are a synonym for
resources. Tangible resources refer to physical capi-
tal resources, such as plant, equipment and finances,
whereas intangible resources span the human, orga-
nizational, and knowledge-based resources
(Conner & Prahalad, 1996; Eisenhardt & Santos,
2000). An organization that has a solid grasp of its
resource mix, including its strengths and weak-
nesses, is well positioned to decide which resources
it plans to develop and invest in versus others.
Examples of strategic resources include reputation,
brand recognition and innovativeness. 3M
Company, for example, fosters a culture of innova-
tiveness in many ways, including its bootlegging
policy. 3M has such unique innovative practices
that rival firms cannot copy them. 3M’s exceptional
strength (intangible resource) is that innovativeness
is embedded into its fabric as a cultural practice.
According to Barney’s framework (Barney,
2011), resources are strategic when they meet four
specific characteristics – Value, Rarity,
Inimitability, and exploited by the Organization
(VRIO).
Valuable resources provide economic value to
the firm. Rare resources are unique, which means
that few rivals have resources of this nature –
inimitable resources are difficult to copy by rivals.
Finally, when certain resources also have strong
organizational support, these are the resources
that the organization invests its time and money
into cultivating further. The presence of these
competitive characteristics, or VRIO (Barney,
1991, Barney & Wright, 1998), leads to degrees
of competitive advantage. A detailed explanation
of this framework and its application is available
in the fifth chapter of Barney’s textbook (2011)
Chapter 5.
Typically, organizations have less than
a handful of VRIO resources. As of 2016, Apple
is definitely VRIO in terms of its brand name and
customer loyalty. However, it is at competitive
parity in terms of logistics. When one thinks
about Apple’s innovativeness and strong customer
loyalty base, it definitely has a sustained competi-
tive advantage.
Empirical studies indicate that the RBV has
contributed extensively to the field of human
 50 Kam Jugdev
resource management, economics and finance,
entrepreneurship, marketing, international busi-
ness (Barney, Wright, & Ketchen, 2001), and
more recently to other management fields
(Barney, Ketchen, & Wright, 2011) including
IS (Seddon, 2014). The traditional emphasis in
project management has been on tangible
resources (such as tools and techniques including
methodologies, software, project management
offices, risk assessment tools, and templates).
Over the past decade, some project management
academics have used theories from strategic
management and applied them to project manage-
ment. For example, one stream of literature
focused on the RBV (Jugdev & Mathur, 2006;
Jugdev, Mathur, & Fung, 2007; Mathur, Jugdev,
& Fung, 2007, 2013). These authors identified
difficult to copy and embedded intangible project
management resources such as social capital, tacit
knowledge, communities of practice, and mentor-
ing. Other streams of research focus on the strate-
gic management theories of dynamic capabilities/
competences and absorptive capacity (Drouin &
Jugdev, 2014; Drouin et al., 2013; Killen, Jugdev,
Drouin, & Petit, 2013; Killen, Jugdev, Drouin, &
Petit, 2012). Whereas capabilities are activities
that produce outputs important to an organization
(Winter & Szulanski, 2001), an organization’s
dynamic capabilities are its ability to constantly
integrate, build and reconfigure internal/external
competences (Teece, Pisano, & Shuen, 1997) to
develop new sources of competitive advantage.
Absorptive capacity pertains to an organization’s
ability to integrate external information toward
innovative capabilities (Cohen & Levinthal,
1990). The RBV, dynamic capabilities, and
absorptive capacity perspectives emphasize
knowledge-based resources in project manage-
ment, which are essentially intangible in nature.
The reason this is important is that the strategic
management literature shows that intangible
resources are more likely to be sources of
competitive advantage (Eisenhardt & Santos,
2000). There are two important distinctions to
note. First, although the academic literature
draws distinctions between resources, capabil-
ities, and competencies, these distinctions become
irrelevant in practice (Barney & Arikan,
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2001). Second, as assessed by the VRIO frame-
work, not all resources are the same. This concept
also applies to organizational project management
resources. For an in-depth understanding of
specific strategic management theories as applied
to PPP management by project management
researchers, please refer to these resources
(Killen et al., 2013; Killen et al., 2012). Research
of the nature described in this section contributes
to advancing knowledge in both strategic manage-
ment and project management.
As rival firms compete to deliver greater value
to customers, corporations are turning to project
management as a component of their business strat-
egy. Their intent is to invest in the right resources so
that they can be more efficient and effective.
The next section highlights some of the strategic
management limitations of OPM3. The chapter then
concludes with the importance of taking a strategic
management perspective to OPM3.
Organizational Project Management
Maturity Model
In the 1980s, organizations such as the
Department of Defense needed effective ways
with which to evaluate outsourced software
development capabilities. At that time, Carnegie
Mellon University’s Software Engineering
Institute developed the process improvement-
oriented (Ngwenyama & Nielsen, 2003) capabil-
ity maturity model (Carnegie-Mellon, 2015). This
capability maturity model is a five-step process
model where each step represents increased
predictability, effectiveness, and control of the
software development processes. However, the
capability maturity model has been criticized for
lacking a theoretical foundation.
In keeping with ISO standards, PMI develops
standards through consensus via joint groups of
practitioners and researchers. Back in 1998, PMI
chartered a team to develop the first OPM3 stan-
dard, which was published in 2003 (Fahrenkrog,
Abrams, Haeck, & Whelbourn, 2003). PMI origin-
ally based the OPM3 standard on the capability
maturity model for software development whereby
an organization would “mature” from level 1 to

a level 5. However, unlike prior maturity models,
the current OPM3 is not a system of overall matur-
ity. The OPM3 standard guides organizations as
they assess their progression against a range of
comprehensive organizational best practices.
Sequentially, the stages of OPM3 involve standar-
dizing, measuring, controlling, and continuously
improving (Chui, 2005). In OPM3, improving
maturity is analyzed in terms of best practices at
the PPP levels. Within the five process improve-
ment stages (initiating, planning, executing, clos-
ing, and controlling) and PPP domains, progression
with respect to incremental capabilities leads to one
of 600 best practices (as identified and defined by
PMI). OPM3 is now in its third edition (2013)
and accredited by the American National
Standards Institute. The standard also contains
a best practices self-assessment module. PMI
also developed an “Implementing OPM Practice
Guide.” The implementation guide helps organiza-
tions develop effective methodologies by describ-
ing the components of a methodology. This guide
includes tools, templates, and resources to help
organizations with the process.
Although the intent of OPM3 is to link successful
PPP practices to the organizational strategy and, in
doing so, enhance overall effectiveness (maturity),
the standard falls short, as it covers implementation
but not formulation or strategic management the-
ories related to competitive advantage. In PMI’s
definition, OPM3 is “a strategy execution frame-
work that utilizes portfolio, program, and project
management, as well as organizational enabling
practices to consistently and predictably deliver
organizational strategy to produce better perfor-
mance, better results and a sustainable competitive
advantage” (Project Management Institute, 2013,
p. 239). However, OPM3 should be more than
a consistent and predictable way of delivering strat-
egy for sustainable competitive advantage.
As discussed, a sustainable competitive advantage
does not stem from best practices because such
practices do not meet the VRIO criteria. It is next
to impossible to deliver a consistent and predictable
organizational strategy within the turbulent and
hypercompetitive environment. Further, strategies
are both deliberate and emergent. OPM3 purports
to strengthen the ties between planning the strategy
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Strengthening the Connections; Strategy & OPM 51
and executing it, thereby, enabling organizations to
align project results with organizational success.
However, PMI assumes that readers understand
concepts and strategic management that pertain to
developing an organization strategy because the
standard focuses on implementing OPM3 to execute
the strategy.
The OPM3 glossary covers many OPM3 terms,
but few strategic management terms as discussed
herein. Given the breadth and depth of conceptual
and empirical literature in the strategic manage-
ment domain on competitive advantage, the author
assessed the third edition of the standard (Project
Management Institute, 2013) using a content ana-
lysis approach (the details of which are available
upon request). The author developed a list of
thirty-two commonly used search terms from the
field of strategic management. These terms were
classified according to five categories based on the
aforementioned overview of strategic manage-
ment: 1. strategy/missions/vision, 2. degree of
competitive advantage, 3. value for shareholders/
stakeholders, 4. industry analysis, and 5. internal/
external assessment. The analysis indicated that
none of the aforementioned strategic management
frameworks were covered in OPM3. Out of the 37
terms in the OPM3 glossary, the only term related
to strategic management was “strategic goals”
(Project Management Institute, 2013). Of the
thirty-two commonly used terms in strategic man-
agement, 71 percent had low counts in the stan-
dard. For example, the standard repeatedly refers
to best practices and OPM3 as a way to predictably
and controllably develop outcomes. Recall though,
that best practices can be copied and that sources
of competitive advantage must meet the VRIO
criteria. Further, the term capability was not
referred to in the strategic management context
of dynamic capabilities, a well-known theory in
strategic management.
The assessment of the OPM3 standard raises
a number of questions. Why is strategy not defined?
What about mission and vision? A reader unfamiliar
with degrees of competitive advantage may inad-
vertently think that OPM3 will help their organiza-
tion develop a sustainable competitive advantage.
Note that the different degrees of competitive
advantage are not covered in the OPM3 either.
 52 Kam Jugdev
OPM3 in the context of PMI’s standard helps us
understand part of the strategic management story
because it deals with implementing strategy.
OPM3 can be a vehicle for a sustainable compe-
titive advantage through such strategies whereby
readers think of OPM3 more holistically in the
strategic management context. Readers are also
encouraged to view the strategic management
process inclusively by viewing the process as
one that involves decision-making at all levels of
their organization. Similarly, PPP management
practices should demonstrate a clear and direct
link to the strategic management intentions of
the firm. Readers should embrace strategic
management frameworks as they assess their
corporations for sources of competitive advan-
tage. The combination of industry-view frame-
works and the RBV will help in this regard.
Some readers may want to delve further into pro-
ject management research based on the RBV and
dynamic capabilities to enhance their appreciation
of how academics are applying these strategic
perspectives to PPP management. Doing so will
enable readers to think about OPM3 in terms of
the tangible and intangible resources. The true
sources of competitive advantage are the intangi-
ble resources. What are the intangible OPM3
resources that readers can identify within their
own corporation? Exploring questions of this nat-
ure will help readers ascertain which resources are
worth investing in and cultivating toward
a competitive advantage.
One of our roles as researchers is to dissemi-
nate research that helps practitioners be more
reflective in their adoption and use of
standards. Contributions toward this can involve
a manuscript section on implications to practice.
Another example includes publishing in
practitioner venues. Some researchers may be
interested in developing case studies/simulations
that demonstrate the application of strategic
management theories to practice, for example,
by including an OPM3 dimension. No doubt,
there are other creative strategies that will come
to mind and help bridge the divide between prac-
tice and theory (Rynes et al., 2001) whereby
research can be more meaningful to practice.
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Conclusion
At the outset, the chapter highlighted contributions
from select scholars in strategy – Robert Grant,
Michael Porter, Jay Barney, and Henry
Mintzberg – and introduced readers to key concepts
of strategy. The chapter then highlighted some
limitations of PMI’s OPM3 standard.
Numerous companies practice project manage-
ment, but how many actually perceive of the
discipline as having clear linkages to the strategic
management process? For much too long, the
input–process–output approach to project manage-
ment has dominated our thinking, as has the
perspective that project management is an
operational construct. Just as senior executives are
visionary as they guide and lead the organization
toward success, they are also contemplative.
Astute senior executives understand that not all
deliberate strategies will materialize. They also
understand that sometimes, emergent strategies
are the ones worth capitalizing on. They further
appreciate that strategies can emerge from within
the organization and are not always a top-down
undertaking. We encourage readers to embrace
OPM3 as a strategic management construct.
Doing so will help us advance OPM3 in practice
and research.
Strategy is the heart and soul of an organization.
Organizations with a clear strategy are more effec-
tive in the competitive marketplace.
Acknowledgments: I would like to acknowledge
the thoughtful and informed reviews on this manu-
script from the book reviewers, detailed edits by
Gita Shankar, and meticulous editing from my
good friend and colleague Mary Vellinga, with
whom I have worked closely for over fifteen
years. I would also like to acknowledge the enthu-
siastic and knowledgeable contributions from
Raina and Jeevan Jugdev (my niece and nephew)
for their insights on pop stars and their strategies
for success. Raina is thirteen years old and Jeevan
is eleven years old. Their mom, Paula Jugdev
facilitated the lively family discussions for this
analysis. She also proofread the sections on pop
stars for interpretation and accuracy.

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 CHAPTER
5
Project Portfolio Management
A Dynamic Capability and Strategic Asset
CATHERINE P. KILLEN and NATHALIE DROUIN
1 Introduction
The previous chapters of this book have initiated the
discussion on strategy and organizational project
management (OPM), outlining the strategic per-
spectives and foundations underlying organizations
and OPM and introducing the resource-based view
(RBV) of strategy and competitive advantage.
In this chapter, we introduce the concept of dynamic
capabilities (DC) and explore how the DC perspec-
tive extends the RBV perspective on strategy and
competitive advantage; in particular, its relevance
to OPM. We outline the scholarly debates on the
definitions of DCs, methods to study and measure
DCs, and highlight the research that relates DCs to
project and portfolio management in the context of
OPM.
OPM is defined as “the integration of all project
management-related activities throughout the
organizational hierarchy or network . . . It is imple-
mented by managers involved in project activ-
ities through organizational and managerial means,
and governed by the agency responsible for govern-
ing the organization” (Drouin et al., 2016, pp. 3–4).
OPM takes a holistic perspective on an organiza-
tion’s projects and its project-related network of
strategic and collaborative initiatives that are gov-
erned and supported at the organizational level.
In the OPM context, we highlight the role of project
portfolio management (PPM) and its contribution to
the development of sustainable competitive advan-
tage by acting as a DC. We show how the OPM
perspective helps to explain the mechanisms
through which a DC such as PPM can influence
the evolution of a wide range of project manage-
ment (PM) activities and enable response to change.
We propose that the resulting competitive advan-
tage can be sustainable provided that the PPM
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capability is truly a DC and that the OPM
approaches enable reconfiguration and change in
resourcing and activities. All in all, PPM provides
competitive advantage by acting as a DC by dyna-
mically adjusting the organization’s portfolio of
projects and reconfiguring resources to respond to
changes in the environment (Killen et al., 2007).
As a strategic asset for OPM, PPM acts as a DC
by ensuring the strategic alignment of the project
portfolio and the efficient use of PM resources, as
well by overseeing the changes required to sustain
competitive advantage.
Much attention has been paid to competitive
positioning as a source of competitive advantage
(Porter, 2011), where differences in competitive
success are explained by differing strategic choices.
However, in many circles, the quest for the sources
of competitive advantage has returned to a focus on
the internal workings of an organization and the
development of Penrose’s idea (1959) that the prof-
itability and growth of a firm should be understood
in terms of its possession and development of
unique resources (Dosi et al., 2000, p. 13; Grant,
1991). As more specifically outlined in Chapter 4,
which introduces readers to key concepts from
strategy, the RBV is a strategic perspective that
takes an internal view of organizational capability
and explains differences in performance on the
differences in organizational resources. The RBV
assumes that resources are not uniform across
competing organizations and uses this heterogene-
ity to explain the differing organizational success
rates. According to the RBV, resources that are
Valuable, Rare, Inimitable, and Nonsubstitutable
(VRIN) support the development of sustainable
competitive advantage by being difficult for other
organizations to copy or acquire (Barney, 2013,
1999, 1991; Barney, Wright, & Ketchen, 2011,
55
 56 Catherine P. Killen and Nathalie Drouin
2001; Barney, Della Corte, Sciarelli, & Arikan,
2012). Further evolution of the VRIN framework
has produced the VRIO (Value, Rarity,
Inimitability, and exploited by the Organization)
framework, which emphasizes the importance of
organizational support (Barney & Hesterly, 2006,
p. 93; Kaufman, 2015).
This perspective has provided a fruitful base for
OPM research; however, the application of the RBV
in practice is limited to relatively stable environ-
ments with both internal organizational stability and
external environmental stability (Lengnick-Hall &
Wolff, 1999). In contrast, the competitive situation
is increasingly dynamic in many industries, with
ongoing changes in technologies, business models,
and consumer expectations and needs. The need to
adapt to change is recognized as essential for survi-
val in many industries. To address such changeable
environments, an important addition or extension to
the RBV is the identification of “dynamic capabil-
ities” as a class of organizational capabilities that
enable organizations to effectively respond to
changes in the dynamic environments in which
they compete (Teece et al., 1997).
The chapter is structured as follows. First, we
explain the concept of DCs. Second, we summarize
recent research on DCs, and finally, we explore how
DCs relate to OPM.
2 Overview of the Concept of Dynamic
Capabilities
The seminal article by Teece, Pisano, & Shuen
(1997) marked the beginning of the surge in interest
in the DC concept and still forms a backbone to
many definitions and interpretations. According to
Teece et al. (1997), the DC approach focuses on
ways that organizations integrate, build, and
reconfigure their resources to compete in dynamic
environments. Their “processes, positions and
paths” (PPP) framework (Teece et al., 1997) pro-
vides an overview of the mechanisms through
which DCs add value. Dynamic capabilities are
shown to be specific organizational routines or
processes that depend strongly on underlying
organizational resources to generate sustainable
competitive advantage. The PPP framework also
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highlights that DCs are path-dependent; the
historical and future paths are important to the
organizational decisions and learnings.
Eisenhardt and Martin (2000) explored DCs in
the other highly influential study that has shaped
the debate and definitions on DCs (Peteraf et al.,
2013). Eisenhardt and Martin clarified that DCs
are “enabling” resources that add value through
reconfiguration of the resource base; they are not
sufficient to add value by acting alone. DCs are
“specific strategic and organizational processes
like product development, strategic alliancing
and strategic decision-making that create value
for firms within dynamic markets by manipulating
resources into new value-creating strategies”
(Eisenhardt & Martin, 2000, p. 1106). Eisenhardt
and Martin extend the discussion on path
dependence and explain that DCs require the
prior establishment of supporting capabilities
through a sequential order of implementation
(Eisenhardt & Martin, 2000). An important
contribution by Helfat et al. (2007) is to identify
the role of “purposeful” change in DCs, offering
an evolved definition of a DC as “the capacity of
an organisation to purposefully create, extend,
or modify its resource base” (Helfat et al., 2007,
p. 4). Following a review of the literature, Barreto
(2010), identified four elements of DC: the pro-
pensity to sense opportunities and threats, the pro-
pensity of change to the resource base;
the propensity to make timely decisions; and the
propensity to make market-oriented decisions.
The two latter elements specifically highlight the
nature of a DC as a decision-making capability.
Barreto’s focus on “propensity” aligns with Wang
and Ahmed’s (2007) perspective on the behavioral
orientation of an organization. Barreto offers this
definition: “A dynamic capability is the firm’s
potential to systematically solve problems,
formed by its propensity to sense opportunities
and threats, to make timely and market-oriented
decisions, and to change its resource base”
(Barreto, 2010, p. 271).
Some of the debate about DCs relates to concepts
about organizational capabilities and routines – and
how these “patterned elements” (Winter, 2003) or
“routinized activities” (Zollo & Winter, 2002) can
form part of an organization’s valuable resource

base. DCs involve shaping lower-order capabilities
such as operating routines into capabilities that
are the result of a dynamic change process (Winter,
2003; Cepeda & Vera, 2007). From this perspective,
DCs can be viewed as a “learned and stable pattern of
collective activity through which the organization
systematically generates and modifies its operating
routines in pursuit of competitive advantage” (Zollo
& Winter, 2002, p. 340). Similarly, a DC can be
viewed as a particular type of organizational capabil-
ity that focuses on learning processes and provides
organizations with the ability to reconfigure
resources and routines to adapt to changing environ-
ments (Jarzabkowski & Wilson, 2006).
A central concept in DCs is the ability to
respond to change in the environment. Some
research shows that DCs are more effective in
more turbulent environments (Wilden, Gudergan,
Nielsen, & Lings, 2013; Eriksson, 2014), while
a study by Schilke (2014) found an inverted
U-shaped relationship in the ability of a DC to
contribute to competitive advantage; the advan-
tage was strongest in medium levels of dynamism
whereas high and low levels of change resulted
in weak influences on success from the DC.
To remain effective in turbulent environments,
a DC must itself be dynamic; DCs must include
capabilities for renewal and evolution.
2.1 Reviews of DC Literature
The DC framework is still relatively young and
definitions and methods for research are not firmly
established. The large volume of often fragmented
literature, drawing upon differing perspectives
and examples, has prompted the publication of
a number of literature reviews that aim to conso-
lidate and clarify the research landscape. One
recent study (Peteraf et al., 2013) highlighted the
divide between two camps – depending upon
which of the seminal works on DC are most
strongly followed – either the work by Teece
et al. (1997) or Eisenhardt & Martin (2000).
Their evaluation of the 142 most influential papers
on DCs concluded that both of the perspectives
introduced in these seminal works are valuable;
the paper recommends convergence to build on the
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Project Portfolio Management 57
strengths of both. Other literature reviews include
the review by Barreto (2010), which concluded
with the four propensities as discussed above.
Another literature review by Wang and Ahmed
(2007) summed up the DC literature from
a learning-based behavioral perspective – further
findings are discussed under “learning” below (see
Section 3.1).
From the strategic management perspective,
Ambrosini and Bowman (2009) offer a review of
DCs in a Special Issue of the British Journal of
Management on Current Debates and Future
Directions. Ambrosini and Bowman suggest that
there are different levels of DCs, from incremental
capabilities, to renewing capabilities that act
on the resource base, and on to regenerative
capabilities that act on the existing DCs.
Also from a strategic management perspective,
Vogel’s (2013) bibliometric analysis provides an
interesting glimpse of the trends in DC research.
Over 1,000 papers published between 1994 and
2011 were analyzed. Clusters of themes and their
evolution reveal how the field is converging
and differentiating as it finds its identity. The DC
perspective is shown to draw upon and contribute
to both organization theory and strategic manage-
ment. The volume of relevant literature doubled in
the final three years of the eighteen years included
in the study (Vogel, 2013).
As the literature on DCs grows, other reviews
on DCs reveal an increasing number of specia-
lized perspectives – ambidexterity as a DC
(O’Reilly & Tushman, 2008), radical product
innovation as a DC (Slater, Mohr, & Sengupta
2014, O’Connor, 2008), entrepreneurship as
a DC (Zahra, Sapienza, & Davidsson, 2006),
and dynamic managerial capabilities (Helfat &
Martin, 2014).
While the reviews each provide useful
perspectives and propose ways to consolidate
and make sense of the literature, there remains
a wide variety of perspectives on DCs. Although
convergence does not seem near, we identify
some common themes in DC research that are
relevant to OPM in this chapter. First, however,
we discuss some of the criticisms and shortcom-
ings of DCs.
 58 Catherine P. Killen and Nathalie Drouin
2.2 Criticisms and Shortcomings of DCs
The growing body of research and literature on DCs
includes an ongoing debate about whether it is
a valid theoretical perspective. The DC perspective
is sometimes referred to as a “theory”; however,
convincing arguments reveal that the DC concept
is not developed enough to satisfy the definition of
a theory (Arend & Bromiley, 2009; Helfat &
Peteraf, 2009). Most research accepts this line of
argument and DC is usually referred to as
a “framework” or a “view,” one that draws on
theoretical perspectives, but that is not a theory in
itself. The DC concept is evolving; it is still at its
infancy and its work is mainly conceptual and has
unresolved measurement issues (Arend &
Bromiley, 2009; Helfat & Peteraf, 2009).
Some authors believe that the premises behind
the RBV and DCs are flawed due to tautological
definitions. Priem and Butler (2001) argue that
flawed circular reasoning is used: the definition
that resources and capabilities must be valuable to
contribute to competitive advantage is tautological
when combined with the proposition that the crea-
tion of competitive advantage helps to define
whether contributing resources or capabilities are
valuable. Other authors argue that, although the
RBV can be defined tautologically, the theory is
not tautological in essence. These authors also sug-
gest definitions that are constructed specifically to
avoid tautology (Zollo &Winter, 2002; Barney
et al., 2001; Peteraf & Barney, 2003; Helfat et al.,
2007). Further, to avoid the problems of tautology
in DCs, “it must be feasible to identify discrete
processes inside the firm that can be unambiguously
causally linked to resource creation” (Ambrosini &
Bowman 2009, p. 44). Early criticisms also pointed
out the lack of empirical research and the difficulties
in empirically testing such concepts (Bacharach,
1989; Priem & Butler, 2001).
One of the most common shortcomings of DCs
is highlighted repeatedly: as a relatively new field,
there is a need for further empirical research and
for methodology guidance on how that research
can best progress (Eisenhardt &Martin, 2000;
Zahra et al., 2006; Martinsuo & Lehtonen, 2007).
Research in specific environments is needed, and
an understanding of how DCs may operate in
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different fields will strengthen the field (Helfat
et al., 2007). Barreto (2010) calls for more work
on boundaries and contingencies; DCs are thought
to enable success in the face of dynamism, but
the mechanisms for enabling this success are
less clear.
The volume of research has escalated in recent
years, generating an increasing amount of empirical
findings. However, authors continue to cite the need
for further empirical research conducted on defined
capabilities or routines in specific environments
(Schilke, 2014), and much of the research is still
conceptual.
3 Themes in the DC Literature
A number of interrelated themes are identified in the
DC literature. We identified four influential per-
spectives that underpin much of the DC research
and have implications for OPM research. These
perspectives are not mutually exclusive and are
often used in combination. The four perspectives
are: learning and knowledge, context dependency,
strategy-as-practice, and microfoundations.
Although they are often combined, each perspective
provides a unique lens for investigating DCs while
providing links to previous research and sugges-
tions of research methodologies. This section
summarizes the literature on each of these themes
across the management literature. Section 4 then
takes a more focused look at DC research from an
OPM perspective.
3.1 Learning and Knowledge
A strong learning perspective is found in a growing
segment of the DC literature (Cepeda & Vera, 2007;
Easterby-Smith & Prieto, 2007; Zollo & Winter,
2002). In their review of the DC literature, Wang
and Ahmed (2007) identified three aspects of DC
research that emphasize learning-based behavioral
orientations: adaptive capacity, absorptive capacity,
and innovative capacity. As a learning perspective,
the concept of adaptive capacity (the ability to
identify and capitalize on emerging market
opportunities) underpins research on DCs in
entrepreneurship and new product development

(Zahra et al., 2006; Sicotte, Drouin, & Delerue,
2014). In fact, by definition, processes for learning
and adaptation underpin DCs (Eisenhardt & Martin,
2000; Winter 2003). Absorptive capacity has been
identified as a DC due to its role in enabling orga-
nizations to respond to external change through
recognizing and integrating new knowledge for
competitive gain (Zollo & Winter 2003; Killen
et al., 2008, Lichtenthaler, 2009; Zahra & George,
2002). Learning and feedback loops are an essential
aspect (Todorova & Durisin, 2007).
Learning perspectives are also found in the lit-
erature on DC studies that explore cognition and
knowledge management (Easterby, Smith, &
Prieto, 2008; Chiva & Alegre, 2005) and in the
ways intellectual capital contributes to competitive
advantage (Hsu & Wang, 2012; Wang et al., 2014).
Processes for learning and knowledge management
are highlighted in a review of empirical DC research
(Eriksson, 2014). For project-based organizations
operating in dynamic environments, these themes
are central to the development and ongoing
evolution of PM and PPM capabilities and in the
development of integration processes that are
required for true OPM.
3.2 Strategy-as-Practice
Practice-based research aims to understand
complex organizational phenomena by studying
actual practices; collecting information on everyday
activities in a holistic and contextual manner (Cook
& Brown, 1999; Whittington, 2003; Jarzabkowski
& Wilson, 2006; Johnson, 2007). When DCs are at
play, practice-based research methods are particu-
larly useful as prescriptive research methods are not
able to best capture the unfolding of events in
response to change. The strategy-as-practice per-
spective views strategy as a managerial activity
(Johnson, 2007) and provides valuable insights in
strategy studies that involve DCs (Regnér, 2008).
By studying the activities and micro-strategizing
activities that are distributed throughout an organi-
zation, the strategy-as-practice lens enables consid-
eration of “how” of strategies are implemented,
whereas much strategy research and theory stops
at the “what and why” of strategy (Jarzabkowski,
2003; Johnson, 2007).
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Project Portfolio Management 59
There is a strong alignment between strategy
and DCs; many DCs involve strategic processes,
and the interest in understanding emergent strategy
(and not just the planned, deliberate strategy pro-
cesses) strengthens the role of DCs (Ambrosini &
Bowman, 2009; Jarzabkowski, 2004; Jarzabkowski,
Balogun, & Seidl, 2007; Jarzabkowski & Spee;
2009). Other studies acknowledge the role of strat-
egy, DCs and practice-based studies (Winter, 2003;
Teece et al., 1997; Eisenhardt & Martin, 2000).
A study of micro-strategizing activities shows pat-
terns of activities that support the evolution of DCs
(Salvato, 2003).
OPM offers a strategic perspective on organiza-
tions by integrating all PM-related activities from
strategic to operational. The strength of a strategy-
as-practice research approach has been illustrated in
PM and PPM studies. For example, the DC perspec-
tive was employed in a practice-based study that
proposes a dual model of strategic change in PM
(Biesenthal, 2013). See Section 4 for further exam-
ples and discussion on the applicability of strategy-
as-practice research methods for exploring OPM,
PPM and DCs.
3.3 Microfoundations
Research into the “microfoundations” of organiza-
tional capabilities explores the specific actions and
processes that make up an organizational capability.
Microfoundations are sometimes studied at the
individual cognition level (Gavetti, 2005), drawing
on the level of specific human interactions rather
than at the organizational level (Argote & Ingram,
2000). From a DC perspective, microfoundations
are proposed to be based in organizational struc-
tures and procedures and involve the particular
skills and rules that underpin organizational
capability (Teece, 2007).
The literature offers two main structures on
studying DCs from a microfoundational perspec-
tive. Felin et al., 2012 identifies microfoundations
of routines (including DCs) at three levels: indivi-
dual microfoundations, processes and social
interactions, and structural microfoundations.
These combine and interact to build the routines
and capabilities that underpin organizational
competitive advantage. In fact, as Barney and
 60 Catherine P. Killen and Nathalie Drouin
Felin (2013) highlight, it is the aggregation of these
multiple microfoundations that build capabilities,
and this aggregation as a useful, identifiable orga-
nizational routine or capability is what creates
value. Teece (2007) proposes a different structure
for studying microfoundations from a DC perspec-
tive. He draws upon his Sensing, Seizing, and
Transforming framework for DCs (Teece, 2007)
and identifies specific microfoundations associated
with each. For example, microfoundations
associated with “sensing” include aspects such as
processes for accessing information on external
science and technological developments or pro-
cesses to assess changing market trends. Research
that investigates the specific actions and microfoun-
dations of a DC, and how these combine and inter-
act, can extend our understanding of DCs and how
they create competitive advantage.
Examples of microfoundation research can be
found in studies on individual cognition and its
effect on DC development. For example, Helfat
and Peteraf (2015) explore managerial cognitive
capabilities and DCs, and “dynamic managerial
capabilities” have been identified as a specific
microfoundation of DCs (Helfat & Martin, 2015;
Adner & Helfat, 2003). Transactive memory
capabilities are another microfoundation asso-
ciated with DCs in the literature (Argote, 2012).
“Transactive memory” is a knowledge capability
and explains how team members are able to share
knowledge and work together to exploit their
complementary knowledge. Other examples of
microfoundational DC research are included in
Section 4 where we explore the research on
OPM and DCs.
3.4 Context Dependency
As highlighted in the section on criticisms and
shortcomings of the DC perspective, as a relatively
new perspective, there is a need for more empirical
research and methodological guidance to advance
the field. However, researchers acknowledge the
importance of context for DC studies (Collis,
1994; Winter, 2003), and suggest that “Rather than
looking for formulas for generalized effectiveness,
researchers should recognize that the value of DCs
is context dependent” (Barreto, 2010, p. 277). There
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are repeated calls for research on specific organiza-
tional processes to generate empirical data for the
continued development of RBV and DC theories
(Eisenhardt & Martin, 2000; Helfat et al., 2007),
as such studies place DCs in context and are able to
produce findings related to the specific practices in
that context.
Context is indeed increasingly evident in much of
the DC research. Some studies particularly focus on
context as a differentiator while others provide
examples within a context; both provide findings
to contribute to the ongoing development of DC
research. A study of the contingencies that affect
DCs found that “organic” organizational structures
(as opposed to mechanistic rule-based structures)
facilitate the impact of DCs on organizational per-
formance (Wilden et al., 2013). The performance
effects of DCs were also found to be contingent on
the competitive intensity faced by firms in Wilden
et al.’s study. This finding is also reflected in
a recent study where Schilke (2014) found that
both alliance capabilities and new product develop-
ment capabilities act as DCs. However, in these
contexts, the study revealed a U-shaped relationship
where the contribution of these capabilities to com-
petitive advantage is strongest under intermediate
levels of dynamism but that the contribution is
weaker in stable environments or in highly dynamic
environments.
DCs have been studied in many different
contexts. Clusters of studies within a particular
context enable a deeper understanding and may
offer some generalizations within that context.
For example, multiple studies identify alliance
capabilities as DCs due to the role of alliancing in
the acquisition and tailoring of resources to meet
changing conditions; and the strong role of routines
and processes in developing alliance capabilities
(Eisenhardt & Martin, 2000; Kale & Singh, 2007;
Anand, Oriani, & Vassolo, 2010).
Entrepreneurship and innovation are contexts that
feature strongly in DCs literature. Entrepreneurial
management is said to be responsible for sensing
opportunities in a dynamic environment and acting
to configure resources to address the opportunities –
thus acting as a DC (Teece, 2007; Zahra et al., 2006;
Newbert, 2005). Innovation through the development
of new products and services similarly requires

DCs. Product and service development is unpredict-
able and dynamic, and requires an ever-changing
mix of resources (Eisenhardt & Martin, 2000;
Danneels, 2002; Helfat et al., 2007, Tatikonda &
Rosenthal, 2000; Zollo & Winter, 2002), and DCs
are integral to the development of innovation cap-
abilities and the development of competitive advan-
tage through new product development (Ellonen,
Jantunen, & Kuivalainen, 2011).
However, not all product development capabil-
ities are viewed as DCs and some authors and stu-
dies look to higher-level capabilities such as project
and product portfolio management as DCs. This is
because, in many cases, product development cap-
abilities are largely operational capabilities and
a DC is seen as a higher-order capability that directs
the development and evolution of the operational
capability (Winter, 2003). Following this view,
operational capabilities support ongoing develop-
ments using existing processes targeted at the
same types of customers (Helfat & Winter, 2011)
whereas DCs are directed toward strategic change
and aligning the organization with a changing
environment (Zahra et al., 2006).
Following this argument, from an OPM perspec-
tive, innovation and strategic change are best
enabled through project portfolio capabilities rather
than at the project level. As will be discussed more
fully in Section 4, PPM acts as a higher-order DC to
reconfigure resources at a portfolio level to ensure
that the project balance and profiles meet changing
conditions. By adjusting the mix of projects and the
type of projects, PPM can act as a DC even when the
individual product and service development pro-
jects are largely operational. PPM can also provide
the higher-level perspective required to support
ambidexterity capabilities. The capability for ambi-
dexterity is said to be a DC (O’Reilly & Tushman,
2008) due to its ability to allow organizations to
effectively innovate in fairly stable environments
by exploiting current capabilities, while also
addressing dynamic environments with explorative
innovation creating new capabilities.
Context dependency for DCs means that the
effectiveness and operation of a DC will be
affected by aspects of the organization and envir-
onment and that, in different contexts, DCs
may possess particular qualities and include
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Project Portfolio Management 61
identifiable routines. Empirical research is starting
to provide more understanding of DCs through
context-related studies. OPM-related studies are
outlined in Section 4.
4 OPM, PPM, and Dynamic Capabilities
So far, we have anchored our discussions on trying
to understand the DC concept. We highlight that
DCs is a view or perspective, and not a theory, and
introduced some of the main frameworks used to
explain or study DCs. We have also identified
themes within the literature on DCs and highlighted
the importance of empirical studies in helping to
clarify this concept. In order to explore how DCs
can be a strategic asset for OPM, we first need to
more deeply explore the concept of organizational
capabilities and strategic assets.
Richardson (1972) was among the first to empha-
size that organizations can gain a competitive
advantage by developing “appropriate capabilities.”
In organizations, there is a distinction between the
execution of daily business by employees and the
decisions of executives about the deployment and
development of capabilities (Dosi et al., 2002).
Managers face strategic choices in the ways they
deploy their limited resources to gain competitive
advantage and to make that advantage sustainable.
Managers need routines and frameworks to support
strategic decision making in the face of dynamic
change (Rumelt, 1994).
In the PM field, Davies and Hobday (2005, p. 62)
describe project capabilities as “the appropriate
knowledge, experience and skills necessary to
perform pre-bid, bid, project and post-project
activities.” PM capability has been shown to be
a valuable resource that can underpin competitive
advantage in project-based firms (Jugdev, 2004).
While PM capabilities, which are often considered
to be tactical capabilities, can provide benefits in
responding to changes in the environment, it is at
the strategic level that decisions are made that best
enable organizational responsiveness.
In sum, assets are embedded in how a firm works,
that is, in its unique skills and knowledge base
(Foss, 1997; Rumelt, 1994). Strategic assets are
the set of firm-specific resources and capabilities
 62 Catherine P. Killen and Nathalie Drouin
developed by management as the basis for
creating and protecting the firm’s competitive
advantage (Amit & Schoemaker, 1993). DCs are
valuable strategic assets for the effective rede-
ployment of internal and external competencies.
The emphasis is on the shifting character of
the environment and the key role of strategic
decisions by managers in the reconfiguration of
firm resources (Teece, 1997).
4.1 Defining OPM
Projects, PM, and PPM capabilities are seen as
venues for mastering business, implementing
changes, innovating, and developing competitive
advantage (Drouin & Besner, 2012). In essence,
PM perspectives go well beyond the management
of single projects by establishing the relationships
between individual projects and the wider organi-
zation through the management of multiple pro-
jects (Drouin & Besner, 2012). Aubry, Hobbs, and
Thuillier (2007) used the term Organizational
Project Management (OPM) to describe such an
approach, where project-based organizations inte-
grate multiproject management activities to deal
with strategic alignment, portfolio and program
management, and governance. These authors
defined OPM as “a new sphere of management
where dynamic structures in the firm are articu-
lated as a means to implement corporate objec-
tives through projects in order to maximize value”
(Aubry et al., 2007, p. 332). Building upon Aubry
et al.’s definition of OPM, we add an increased
focus on the importance of “integration” in the
definition adopted for OPM in this book where
we define OPM as the integration of all project
management-related activities throughout the
organizational hierarchy or network (see also
Drouin et al., 2016). Drawing on this overarching
definition, we also see OPM as the act or process
of combining PM activities throughout the
organization. OPM takes a holistic perspective
on the various projects and PM-related activities
that an organization embarks on as a network of
strategic and collaborative initiatives governed
and supported at the organizational level. OPM
can also be viewed as a locus for the integration
of PM-related activities in the development of
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competitive advantage. Finally, we highlight that
OPM is best performed by top managers who
believe that it is an organizational process to inte-
grate project-related activities in a coherent
manner.
4.2 PPM and DC Research
Organizations implement their strategy through
projects using PPM approaches and, thus, PPM is
an integral part of OPM. PPM acts at the strategic
level to enable organizations to take a higher view of
the entire project portfolio, and to support decisions
that ensure alignment with strategy, delivery of
value, and exploitation of synergies that enable the
organization to prepare for the future (Meskendahl,
2010). Response to change through regular portfolio
reviews and adjustments are coordinated through
PPM, and the structures and routines for PPM are
developed to suit the context and are reviewed and
adjusted to ensure that the PPM capability continues
to provide competitive advantage through DC
(Killen & Hunt, 2010; Killen et al., 2008).
According to Killen et al. (2013, p. 350),
“Established PM and PPM capabilities that have
been developed over time and customized to an
organization’s environment are repeatedly asso-
ciated with better outcomes, see for example
(Alvarez & Busenitz, 2001; Cooper, Edgett, &
Kleinschmidt, 2001; Jugdev, Mathur, & Fung,
2007; Killen et al., 2008), prompting project man-
agement (PM) and project portfolio management
(PPM) to be viewed as strategic organizational cap-
abilities.” Gardiner (2014) supports the emphasis on
strategy, learning, and knowledge management in
PPM research and suggests that PPM acts as a DC to
create benefits.
The application of the DC framework to PPM
research has let PPM research to advance beyond
atheoretical correlation-based analysis to provide an
understanding of the mechanisms through which
PPM delivers competitive advantage. The DC fra-
mework provides a framework that helps to analyze
the existing literature as well as to conduct future
research on PPM capabilities (Killen et al., 2007;
Killen et al., 2012; Killen et al., 2013).
This relationship between PPM and DCs is
a strategic asset for OPM, especially through its

key role in implementing changes in organizational
strategy and in informing strategy development and
evolution.
PPM provides competitive advantage by acting
as a DC by dynamically adjusting the organization’s
portfolio of projects and reconfiguring resources to
respond to changes in the environment (Killen et al.,
2007). DCs must evolve in order to stay relevant in
dynamic environments, and several studies high-
light how learning and change play a central role
in the adjustment of the PPM capability. An in-
depth study of six successful innovators found that
organizational learning has a large role to play in the
establishment and continual evolution of PPM
capabilities through tacit and explicit learning
mechanisms (Zollo & Winter, 2002; Killen et al.,
2008, 2010). Similarly, drawing upon the DCs fra-
mework, three learning mechanisms for PM cap-
ability building were identified in a large-scale
railway development project: relating or network-
ing to develop the resources such as “social capi-
tal”; reflecting to learn from experiences and
exploration to improve capabilities; and routiniz-
ing to exploit knowledge and experiences from one
project to the next (Söderlund, Vaagaasar, &
Andersen, 2008). In another study, a process for
project capability building was shown to be trig-
gered by a “vanguard” or “first of its kind” project,
with the process building a new organizational
resource for PM by capturing learning to be
applied in subsequent projects through coevolu-
tion of project-led and business-led learning
(Brady & Davies, 2004).
The advance in the research approaches used
in PM and PPM studies is ongoing; research in
these fields is becoming more likely to be
underpinned by theoretical perspectives, models
and framework, and to employ increasingly sophis-
ticated approaches (Killen et al., 2012; Turner,
2010). Since PPM was identified as a DC (Killen
& Hunt, 2007), the DC perspective has been used
to investigate PPM in a number of studies.
As a conceptual framework, DC was found to be
well suited to the study of PPM processes in uncer-
tain environments (Petit & Hobbs, 2010). Sicotte
et al. (2014) identified innovation portfolio manage-
ment as a new DC following the evolution of team-
and project-based organizational forms. In a study
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Project Portfolio Management 63
of alliance capability and new product development
from a product portfolio perspective, the DC
framework revealed the nonlinear relationship
between environmental turbulence and the
creation of competitive advantage (Schilke, 2014).
Biedenbach and Müller (2012) investigated the
adaptive, absorptive, and innovative capability
aspects of a DC, following Wang and Ahmed’s
(2007) learning-based orientation, and found
a positive correlation between adaptive and absorp-
tive capabilities and project portfolio performance.
The DC perspective (through the associated three
learning capabilities) enabled the identification of
specific organizational processes and relationships
with project and portfolio performance. A study in
a project environment used the DC perspective
to help illuminate the relationship that resource
allocation has to development decisions and con-
tingencies. Such decisions are central to PPM,
although the study did not focus on PPM (Stadler,
Helfat, & Verona, 2013).
The themes identified in Section 3.1 on DC
research have relevance to the ongoing advance
of OPM research on PPM and DC. Learning and
knowledge themes are reflected in many studies on
DC relevant to OPM. For example, Killen and
Hunt (2008) highlighted the role of investments
in tacit and explicit learning mechanisms in
the development of DCs in the form of PPM
capabilities. Following a number of studies
employing strategy-as-practice perspectives
(Müller et al., 2013; Killen & Hunt, 2010), further
use of research methods aligning with the strat-
egy-as-practice perspective are emphasized as
a promising way to advance research on OPM
and DCs (Killen, Clegg, Biesenthal, & Sankaran
et al., 2015). Microfoundational research is
also making significant impact on studies related
to OPM. Teece (2007) outlines how specific
microfoundational actions provide competitive
advantage through DCs by enabling reconfigura-
tion of resources, modifying investments, and
transforming organization in response to change.
Kindström, Kowalkowski, & Sandberg (2013)
studied the microfoundations of DCs for service
innovation in a product portfolio environment and
identified specific microfoundations enabling ser-
vice innovation in manufacturing environments.
 64 Catherine P. Killen and Nathalie Drouin
Combining a learning perspective with microfoun-
dational research, Schneckenberg (2015) explores
innovative capabilities and shows how the interac-
tions between microfoundations in learning and
sharing provide DCs in a technology portfolio
PM environment. Finally, the importance of con-
text for PPM research is highlighted by Martinsuo
(2013), and much of the research is placed within
a particular context (for example, Petit explored
PPM in dynamic contexts [Petit, 2012]) or inves-
tigates the context-dependent nature of PPM prac-
tices (for example, Eggers [2012] found that
contextual factors such as previous experience
affected the development of value in the portfolio.
The development of PPM as a DC was shown to be
an important, path dependent, managerial capabil-
ity in that study).
These studies show how PPM can act as a DC in
different ways and reveal the many research per-
spectives that contribute to the growing research
stream in this area. The research shows how PPM
can act as a DC and be a strategic organizational
asset – thus, PPM is a key aspect of OPM that helps
to build and sustain competitive advantage in
organizations.
5 Conclusion
We have shown how DCs are developed in
organizations, how they can create and sustain
competitive advantage by enabling organizations
to reconfigure resources in response to change.
The strategic role of DCs is also highlighted, and
the application of strategy-based research
approaches supports the ongoing advance of
research on DCs. As a strategic asset for OPM,
PPM acts as a DC by ensuring the strategic align-
ment of the project portfolio and the efficient use
of PM resources as well by overseeing the
changes required to sustain competitive advantage.
In this regard, when acting as a DC, PPM is
a strategic asset for OPM; PPM integrates and
aligns projects with organizational strategies in
a changing environment, it oversees changes in
the organization, and it produces benefits from
projects through direct influence on project activ-
ities such as funding, prioritizing projects and by
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available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/9781316662243.008
responding to change, and adjusting the resource
base through activities such as bringing in new
resources, training and improving resources, and
outsourcing PM work. When PM-related activ-
ities are integrated throughout the organizational
hierarchy or network, it is the PPM aspect of the
OPM capability that has the strongest strategic
significance, and it is through PPM that the orga-
nization can best strategically respond to change
and sustain competitive advantage. Therefore, to
answer the question about the relationship
between OPM, PPM, and DCs, we propose that
dynamic OPM is enabled through PPM – and,
therefore, when acting as a DC, PPM is
a strategic asset for OPM.
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 PART II

Organizations

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 INTRODUCTION TO PART II
Ralf Müller
Part II complements the strategy and business per-
spectives toward organizational project manage-
ment (OPM) presented in Part I. It does this by
addressing some key organizational, structural,
and governance aspects of OPM.
Part II addresses some implications for organiz-
ing and structuring, as well as processes and tasks in
OPM, such as those required to enable organiza-
tions to undertake the right projects and to support
them organizationally. Through this, Part II goes
beyond the management of single projects and con-
siders the governance and management of groups
and networks of projects, internal and external to the
organization.
Part II starts with governance of organizational
interfaces in projects. This addresses some of the
often neglected interfaces between the governance
of the project-based parts of the organization and
the permanent organization. Governance of OPM
acts, among other things, as the structure to link the
organizational entities needed for managing the
multiproject organization.
These organizational entities are addressed in the
middle of Part II in the form of portfolio and pro-
gram management. The organizational design of
such entities is exemplified by a chapter on project
management offices.
Toward the end of Part II, the chapters return to
the theme of governance, this time addressing orga-
nizational risk management as a governance func-
tion in OPM.
Part II starts with Chapter 6, in which Rodney
Turner and Ralf Müller describe some of the
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governance-related implications of OPM in
terms of governing the interfaces between orga-
nizations involved in projects. These include the
investor, the contractor, and the project organi-
zation. The chapter also describes the govern-
ance of the portfolios and project networks to
which the projects of these organizations belong.
This addresses some new and specific aspects of
governance in the context of OPM and its imple-
mentation in organizations.
In Chapter 7, Julian Kopmann, Alexander Kock,
and Catherine Killen move the focus from govern-
ance to management of portfolios. Here, the role of
portfolio management in the interplay between strat-
egy formulation and strategy implementation
through project portfolios is explored. The chapter
extends the existing literature, which mostly
focuses on the implementation issues of portfolio
management, by describing crucial processes and
tasks that allow for linking the formulation and
implementation of strategy, and hence provides for
an organization-wide understanding of portfolio
management.
In Chapter 8, Peerasit Patanakul and Jeff Pinto
address program management as a function of
OPM. The chapter positions the management of
programs against that of projects, portfolios, and
other multiproject settings. It describes how pro-
gram management fits into a corporate-wide or
OPM perspective. This paves the way for an
integrated view of project, program, and portfolio
management. A specific takeaway for readers are
the examples from government programs, the
73
 74 Ralf Müller
recommendations for improving program perfor-
mance, as well as some future directions for pro-
gram management in OPM.
In Chapter 9, Monique Aubry and Mélanie Lavoie-
Tremblay address organizational design for OPM.
By using the example of project management offices,
this chapter outlines the ways to address the design
issues stemming from the individuality and specificity
of organizational entities, which is necessary for them
to be successful. The example used to illustrate this
shows the wide variety of possible organizational
designs, and that there is no “one size fits all.”
The chapter provides an initial design framework for
project management offices and its implementation
process, and shows research results from applying
this framework in the healthcare industry. It helps
decision-makers in OPM settings to understand the
importance of sense-making of their unique organiza-
tional circumstances, and the need to consider more
than only technical issues for designing their
organization.
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In Chapter 10, Stephane Tywoniak and
Christophe Bredillet address uncertainty adapta-
tion in managing risk in OPM settings. Drawing
from approaches in entrepreneurship (effectua-
tion, design thinking) and high reliability
organizations, a second-order complex thinking
approach is suggested. For this, a required shift
from risk management to uncertainty reduction
and management is presented, which entails
a change of focus from project governance to
project governability.
The themes in Part II address the organiza-
tional design and setup for OPM.
The chapters extend some already established
concepts, but also provide new or complemen-
tary perspectives to existing theories of organiz-
ing for OPM. Thus, Part II reflects on and
broadens the current set of theories, concepts,
and knowledge discussed in recent years in the
literature on organizing and governing
for OPM.
 CHAPTER
6
The Governance of Organizational
Project Management
RODNEY TURNER and RALF MÜLLER
Introduction
Graham Winch (2014) suggests that there are three
organizations involved in the management of pro-
jects (see Figure 6.1):
1. The investor: The organization that initiates the
project. It is a permanent organization. Its aim
is to make an investment; that is to invest in
making some change which will be operated to
deliver benefit to repay the investment.
The change is often a physical asset, but may
be a new product, a computer system, or a new
organization structure.
2. The project: This is a temporary organization
through which the investor makes the invest-
ment. We (Turner & Müller, 2003) define
a project as a temporary organization to which
resources are assigned to do work to deliver
beneficial change. The investor creates the pro-
jects and assigns resources, in the form of
money, people, and materials to deliver the
change. Associated with the change are three
levels of results (see Figure 6.2). The output is
the change, the new asset, or other items sug-
gested above. The output will provide the
investor, or some third party to whom it sells
the investment, with new competencies, which
are called the outcome. The operation of the
outcome provides a benefit that is expected to
repay the investment. With time, the outcomes
may lead to the achievement of higher level
strategic goals.
3. The contractor: The investor usually does not
have the competencies to undertake the project.
Its business is in the operation of the project’s
output, not in doing the work of the project. They
therefore draw on the services of a contractor to
provide the people to do the work of the project.
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In this chapter, we focus on contractors providing
services, usually in the form of labor to do the
work of the project. We will not be talking about
the suppliers of materials or plant and equipment.
All three organizations require governance.
However, there are three interfaces between the
three organizations (see Figure 6.1). These three
interfaces also require governance. Indeed, the
very early work on project governance done by
Rodney Turner and Anne Keegan (1999, 2001)
focused on the interfaces between the contractor
and the investor. In the sections that follow we
discuss the governance of the project, but we do
not discuss the governance of the investor and con-
tractor as companies, which is well discussed in the
literature (Clarke, 2004). We focus on the govern-
ance of the three interfaces. The interface between
the project and each of the investor and contractor is
also clearly a temporary organization which lasts as
long as the project. The interface between the inves-
tor and the contractor may be a temporary organiza-
tion, created for one project. Or it may be
a permanent organization, associated with
a portfolio of projects the contractor does for the
investor.
The project is part of three other organizations (see
Figure 6.3).
1. The investor’s investment portfolio: At any time,
the investor will be making several investments,
and the project will be just one of several projects
it will be undertaking (see Figure 6.4). On the one
hand the investment portfolio is a permanent
organization, in that the investor is making
a rolling wave of investments, and many of the
projects will last more than a year. But most
organizations align the investment portfolio
with the annual budgeting cycle, and so
75
 76 Rodney Turner and Ralf Müller

Exploitation

Improved
Goals
Investor: performance
permanent organization,
projects not core business
Benefit Operation Outcomes
Parent- Client-
child contractor

Projects & Contractor: Resources Project Outputs

programs: Resources permanent
provided-
temporary consumed organization, Implementation
organization projects
core business Figure 6.2. Three levels of results on projects.

2. The contractor’s portfolio of work: The contrac-

Figure 6.1. Three organizations involved in the tor will be undertaking several projects for
management of projects. Adapted from Winch several clients, and so will need governance of
2013:725, Figure 1. its portfolio of projects. (This is the interface
between the project and the contractor in
Figure 6.1.)
3. A network of projects: The project may also
be part of a larger network of projects.
Portfolio of projects in The investor may be in strategic alliances
the investor organization with other organizations, or the project may
be part of a larger initiative to which several
organizations are contributing projects.
We will also discuss the governance of these
three types of organization, but not the interfaces
Portfolio of between them.
Network of
projects in
projects
the contractor

Definition of Governance

We use a simple definition of governance.

Figure 6.3. Three portfolios of which the project is
a part.
each year’s investment portfolio is treated as
a separate entity.
Figure 6.4 shows that the investment portfolio may
be made up of projects, programs, and portfolios of
smaller projects. Program and portfolio manage-
ment are key governance structures for the linking
of project objectives to corporate objectives, and
we will discuss their role when discussing the gov-
ernance of the investment portfolio.
The Organization for Economic and Cooperative
Development (2015) defines the governance of
a company as follows:
Corporate governance involves a set of relation-
ships between a company’s management, its
board, its shareholders, and other stakeholders.
Corporate governance also provides the structure
through which the objectives of the company are
set, and the means of attaining those objectives and
monitoring performance are determined.
There are two essential parts to this definition.
The second sentence defines what governance

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Large Large
project B project B program C
Figure 6.4. The investment portfolio of the investor organization.
does, and the first the stakeholders in the relation-
ship. The OECD is writing about corporate govern-
ance, but we can adapt the definition to refer to the
governance of all organizations.
Thus, the functions of governance are to:
• define the objectives of the organization
• define how those objectives will be achieved
• define how performance will be monitored
Key stakeholders are:
• the principal: the person (natural or legal), which
initiates the work of the organization and receives
the benefit from its operation
• the agent: the person (natural or legal), which
manages the organization on behalf of the
principal
• the staff: the people who do the work of the
organization
• consumers: who buy the outputs or outcomes of
the organization, and so pay the money from
which the principal receives its benefit
• suppliers
• other customers
• the local community
There are three views of governance (Müller,
Shao, & Pemsel 2016):
1. Governance as a control system: for directing
and controlling organizations, for balancing
economic and social goals, and for balancing
individual and communal goals
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The Governance of Organizational Project Management 77
Investment
portfolio
Portfolio of Portfolio of
Large Large
medium small
program D
projects projects
2. Governance as a process: for directing
and controlling the organization and for
defining the rights and responsibilities of
stakeholders
3. Governance as a set of relationships: between
internal and external parties, defining their
rights and responsibilities
You will see that these three views overlap. They
talk about different stakeholders internal and
external to the organization, with different
rights and responsibilities. We list many of the
stakeholders above. Within the field of corporate
governance, there are two schools of thought
(Clarke, 2004): the shareholder school, which
suggests that the agent’s (board’s) sole responsi-
bility is to serve the principal (the shareholders in
the case of a company); and the stakeholder
school, which suggests that the agent (board)
must take account of all the stakeholders, includ-
ing the principal (shareholders). There is substan-
tial evidence that on projects the stakeholder
school is associated with best performance
(Eweje, Turner, & Müller, 2012; Müller &
Turner, 2007; Turner & Zolin, 2012).
There are also two streams of governance
research (Müller, 2016):
1. The design stream: defines how governance
approaches at different levels of the organiza-
tion should be designed, and how they influ-
ence each other
 78 Rodney Turner and Ralf Müller

2. The consequences stream: studies the results back to the 1990s, boards of directors often
of different governance structures, and how took little interest in projects. What they were
they influence different stakeholders and their most interested in was the management of
expectations operations. That was what was generating the
income of the business. They didn’t seem to
Finally, we will talk about governance and the
appreciate that the current operations were the
governance structure. Governance refers to the
sum total of all the previous projects. Projects
governance approaches adopted. The governance
were assigned to the skunkworks; the project
structure is the set of rules, practices, and processes
team was housed in a portacabin at the bottom
adopted to govern the organizations, and the set of
of the carpark, and told to come back when they
rights, roles, and responsibilities of the various
had something to deliver. The US Sarbanes-
stakeholders.
Oxley Act in 2002 put an end to that. Boards
of directors had to be able to predict future cash
Governance of the Investor-Project flows, and so had to take an interest in the likely
Interface out-turn cost and forecast revenues of at least
the larger projects for disclosure and reporting
We do not plan to write about the governance of the purposes. So the first principle is that the board
investor as a company, which is well covered of directors should take overall responsibility
(Clarke, 2004; OECD, 2015). We describe instead for the governance of projects within the
the interface between the investor and the projects organization.
and programs it undertakes. The United Kingdom’s
Association of Project Management (APM) calls
Setting Objectives, What Is to Be Done,
this the Governance of Project Management
Doing the Right Projects
(APM, 2004). The APM guide suggests there are
four purposes of governance: to ensure the
2. There should be a coherent relationship
effectiveness of portfolio management; to ensure
between the business strategy and the invest-
the efficiency and effectiveness of project sponsor-
ment portfolio. The investment portfolio is
ship; to ensure efficiency and effectiveness of the
a key governance structure, which ensures that
management of projects and programs; and to
the projects and programs undertaken are
ensure proper disclosure and reporting is in place
linked to corporate strategy. Often, the corpo-
to meet legal requirements and the needs of stake-
rate strategy will be deliberate; that is, it will
holders. They also suggest that good governance
define what projects and programs are to be
will result in the linking of projects and programs
done. But the organization must remain flexible
to corporate strategy, senior management support
and be responsive to emergent strategies; that
and engagement with other stakeholders, the
is, recognize good ideas being suggested by
development of organizational project management
projects and programs, and be willing to adapt
capability, the breakdown of the projects into
corporate strategy, but the portfolio will remain
manageable steps, and a focus on value for money
the vehicle for that as well.
rather than price.
3. For all projects and programs, there should
APM identifies eleven principles for the
be a business case supported by realistic and
good governance of project management.
relevant information. The business case should
The first is a general principle. Then there are
clearly define the benefit the project or program
principles relating to the definition of objectives,
will deliver, and how it is linked to corporate
the definition of methods, and the definition of
strategy. The business case must be valid, based
control:
on valid information. A key step of portfolio
1. The board of directors has the overall responsi- management is to hold the initiators and
bility for the governance of projects. If you go sponsors of projects accountable for the

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 The Governance of Organizational Project Management
accuracy of the business case of projects and
programs by doing postcompletion reviews.
Defining the Means, How Will Projects
Be Done, Doing Projects in the Right Way
4. There should be disciplined arrangements, sup-
ported by appropriate methods and controls
throughout the life cycle. The organization
needs to define how it manages projects; that is,
it should define the rules and processes for mana-
ging projects, which as we mentioned above is
part of the governance structure. It may need
different methodologies for different types and
sizes of project (Payne & Turner, 1999).
5. Individuals must have clearly defined roles,
responsibilities, and performance criteria.
As we also said, defining roles and responsibil-
ities is part of the governance structure, but
people must also know how they will be
judged.
6. Responsible managers need sufficient represen-
tation, authority, competence and resources to
make decisions. Not only do you need to define
people’s roles and responsibilities, you need to
give them the wherewithal to enact the deci-
sions for which they are responsible.
7. Stakeholders need to be engaged at an appropri-
ate level and in a way that fosters trust. As we
said above, you need to take a stakeholder, not
a shareholder, approach to the governance of
projects.
Defining the Means of Control, Doing
the Right Project in the Right Way
Every Time
8. Projects should have an approved plan with
stage-gates. Decisions taken at stage-gates
should be clearly recorded and communi-
cated. There must be an audit trail for key
decisions on each project. If a problem occurs
later on in a project, where the weak decision
was taken must be identifiable. The objective
is not to apportion blame (see the final princi-
ple) but to avoid it from happening again.
Rodney Turner and Anne Keegan (1999)
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79
showed that, in projects, the governance struc-
ture must be aligned with the transaction, the
project, both for internal and external projects.
This is different from routine supply where,
for external transactions (the market,
Williamson, 1983) the governance structure
is the contract aligned with the transaction,
but for internal supply, the governance struc-
ture is the functional hierarchy, perpendicular
to the transaction (the hierarchy, Williamson,
1983). Projects require functional managers to
release control to project managers for inter-
nal transactions, and functional managers
don’t like that. So functional managers can
be allowed to take back control at stage-gate
reviews.
9. There should be clearly defined criteria for
reporting project status and escalating risks
and issues. Criteria for reporting status is an
essential part of control. PRINCE2 (OGC,
2009), has a clearly defined escalation proce-
dure. The overall project budget has
a tolerance, typically between ±5 percent
and ±10 percent. The project is divided into
stages and the stages into work packages.
The tolerance is divided between the stages
and the stage tolerance between the work
packages. A riskier stage may have a higher
tolerance, and a less risky stage a lower
tolerance; similarly with work packages.
If a work package goes outside its tolerance,
the work package manager must escalate
to the project manager, and together they try
to solve the problem. If the stage goes outside
its tolerance, the stage stops, and the project
manager must escalate to the project’s board.
If the project goes outside its tolerance, the
project’s board must escalate to senior
management.
10. The board should decide when independent
scrutiny of the project is required and imple-
ment such scrutiny. This means sending in
the auditors. There may two reasons why the
board sends in the auditors: the project may be
failing; or it may be so important it must not
fail. In either case, it is important that the
auditors adopt the attitude of being there to
provide a service to help the project team
 80 Rodney Turner and Ralf Müller

succeed, not act like the police. If the auditors
act like the police the project team will resist
them. Unfortunately, auditors will often act
like the police, especially in the public sector.
11. Organizations must foster a culture of
improvement and frank disclosure; and solve
problems to improve performance, not to
apportion blame.
Consequences of the Governance
Structure
Ralf Müller (2009) developed four paradigms for
the governance of project management, based on
whether the organization has a shareholder or sta-
keholder focus (see above) and whether it controls
by behaviors or by results, that is, it defines how
people should do their jobs, or what outcomes they
should achieve. We have shown (Müller, Turner,
Shao, Andersen, & Kvalnes, 2014), that the govern-
ance paradigm influences the behavior of people
working on projects:
• Organizations adopting stakeholder orientation
with outcome control are more likely to empower
project managers, whereas organizations adopt-
ing the shareholder/behavior control approach are
least likely, but the consequence is that project
managers in the former case face the most temp-
tations, whereas project managers in the latter the
fewest.
• Similarly, project managers in the stakeholder
orientation with outcome control approach are
least likely to seek help, but if they do seek help
it is from the project board (for whom they are
producing the project’s results). Project managers
in the shareholder/behavior control approach are
most likely to seek help and will seek help from
their supervisor (the representative of the
shareholders).
• Project managers in organizations that control by
outputs suffer the greatest temptation to overstate
what has been achieved, whereas project man-
agers in organizations that control by behaviors
are most likely to overstate what has been done.
• In organizations with a shareholder orientation,
the sponsor (who represents the shareholders) is
the key stakeholder, whereas in organizations
with a stakeholder orientation, the end users are
the key stakeholder.
• There is greater trust between the project manager
and stakeholders in organizations with
a stakeholder orientation than with a shareholder
orientation.
Governance of the Project
The project is a temporary organization, but as an
organization it requires governance. Above we
stated there are three functions of governance:
define the objectives; define the means of obtaining
those objectives, and to define the means of
monitoring progress. Governance also involves
a set of relationships between key stakeholders.
We are particularly interested in the relationship
between the project manager and project board,
the board consisting of the sponsor (representing
the principal), the senior user, and the senior sup-
plier. Figure 6.2 suggests that there are three levels
of results in projects: the output, the outcome, and
the goal. Figure 6.5 shows that the three functions of
governance and the three levels of objectives
suggest four governance roles: sponsor, senior
supplier, project manager, and senior user.
We illustrate what follows with two examples.
The Chinese government had the goal of achieving
economic development on the north side of the
Yangtze River, just north of Shanghai. Shanghai is
the most economically developed part of mainland
China, but Jiangsu Province, just north of the river,
was not so economically developed. What was stop-
ping economic development was the poor traffic
flow across the river. People were not building
their factories on the north side of the river, because
it was difficult to get their products to Shanghai for
shipment. In the second example, the board of
a company believes it can improve the company’s
profits if it improves marketing.
Defining objectives starts with the goal. In the
first example, the goal is economic development on
the north side of the river; in the second, it is
improved company profits. What is the means to
achieving the goal? This defines the project’s out-
come, the new competencies the investor requires to
achieve the goal. In the first case, it is better traffic

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 The Governance of Organizational Project Management
Owner
Senior
User
Client
Need
Delivered
Outcome
Monitor
Progress
Delivered
Output
Required
Process
Project
Manager
Figure 6.5. Four roles in the governance of projects.
flow across the Yangtze River; in the second case, it
is improved marketing. The outcome now becomes
an objective, a desired result. What is the means of
achieving the outcome? This is the project’s output,
the desired change or new asset. In the first case, it is
a bridge across the river; in the second case, it is
a customer requirements management system.
The output is the means of achieving the outcome,
but it now becomes an objective. What is the means
of achieving the output? That is the project process.
The client is the ultimate principal for the project,
the lead investor. But they appoint the sponsor as
their representative. The sponsor is an agent of the
client. The sponsor has the initial responsibility of
working up the ideas for the project. Indeed, the
project may the sponsor’s idea initially, and they
persuade the client to take an interest. In the case of
the bridge across the Yangtze River, the sponsor
may be somebody from the economics department.
They will investigate ideas for bridges and perhaps
alternatives such as a tunnel or improved ferries.
In the case of the customer requirements manage-
ment system, the sponsor will be a member of the
marketing department who will start to investigate
what the computer systems are available. However,
the sponsor is not a technical expert, and so quite
early on will need to engage a senior manager from
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81
Sponsor
Desired
Outcome
Define
Objectives
Define
Means
Desired
Output
Senior
Supplier
the technical department to help work up the ideas.
Rodney Turner and Anne Keegan (2001) called this
role the “steward”, but PRINCE2 (OGC, 2009),
calls it the “senior supplier,” and we use that termi-
nology here. During the feasibility study, the spon-
sor will investigate the technical and financial
feasibility of the project. They may engage the
project manager to advice on the feasibility of build-
ing the project output. At the end of the feasibility
study, they will choose an option for implementa-
tion. The project manager will then be responsible
for defining and managing the project process to
deliver the output. The project manager is the
agent of the principal to manage the delivery of
the project.
The sponsor also has an important additional role
of sourcing the finance for the project. So the spon-
sor needs to persuade the investor to provide the
money for the feasibility study, front-end design,
detail design, and execution of the project (Turner,
2014). Some people suggest that the sponsor actu-
ally provides the money. The owner or investor
provides the money; the sponsor is responsible for
persuading them to provide the money and to ensure
the continuation of the revenue stream throughout
the project. The sponsor is the owner’s or investor’s
agent for that purpose, as mentioned above.
 82 Rodney Turner and Ralf Müller
During delivery of the project, the process needs
to be monitored and controlled. As the project is
completed, the achievement of the output needs to
be monitored. Does it deliver the desired function-
ality so that it works as required? Then, the achieve-
ment of the outcome and ultimately the goal needs
to be monitored and controlled. We have shown that
it is the responsibility of the senior user to monitor
and control the delivery of the outcome and
ultimately the impact. PRINCE2 (OGC, 2009)
calls this role the “senior user,” but Managing
Successful Programmes (Sowden & The Cabinet
Office, 2011) calls it the “business change
manager.” The two roles are, however, related.
The senior user works for the business change man-
ager. In a program, there will be a senior user for
each project, responsible for achieving the benefit
from that project, whereas the business change man-
ager will be responsible for achieving the overall
benefit of the program. In the case of Yangtze River
bridge, the senior user will be responsible for
achieving better traffic flows, whereas the business
change manager will be responsible for achieving
economic development. In the case of the customer
requirements management system, the senior user
will be responsible for improving marketing,
whereas the business change manager will be
responsible for improving profits.
Figure 6.5 shows four roles. In the very simplest
of projects, such as decorating your home, there will
be just one person. In smaller projects there may be
just two people, but in most projects there will be
four people. PRINCE2 requires there to be four
people.
Unfortunately, within the project management
community there is not a commonly agreed voca-
bulary. In Austria, they call the sponsor the project
owner (Gareis, 2005). However, we like to use the
word owner for the person or organization that
ultimately owns and operates the project’s output
to achieve the benefit, the investor. The Austrian
usage may represent a mistranslation from German.
Other people also call the senior user the sponsor.
However, we like to clearly differentiate between
the pre- and during-project role of championing the
project and obtaining the revenue stream, and the
postproject role of ensuring the outcome and goal is
achieved. (They may be the same person, though
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PRINCE2 insists the two roles are separate.)
PRINCE2 calls the sponsor the project executive.
In the 1980s, people used to call the sponsor the
project champion. Some people still use the word
champion for a narrower role of promoting the
project and wining support for it.
To summarize, the four roles are:
Sponsor: First identifies the potential for perfor-
mance improvement in the business, and pos-
sible ways of achieving that need. Performs
the feasibility of the project, showing its
technical, financial, and commercial feasibil-
ity. Persuades the investor that the project is
a good commercial proposition, and to provide
financing for it, through all the project stages:
feasibility, front-end design, detail design, and
execution. Represents the investor on the pro-
ject board.
Senior supplier: Provides technical input to all the
project stages.
Project manager: Designs, manages, monitors,
and controls the process to deliver the project
output, and is responsible for delivering an out-
put that works according to the desired
functionality.
Senior user or business change manager: Responsible
for achieving the desired performance improve-
ment by ensuring the project’s output is used to
achieve the outcome and ultimate goal.
Governance of the Contractor-Client
and Contractor-Project Interfaces
Governance of the contractor as a company is also
covered by the literature (Clarke, 2004; OECD,
2015). Here, we focus on the management of the
interfaces between the contractor and the investor,
and the contractor and the project. As we said
above, for routine supply, there are two types of
governance structure, depending on whether the
client is an external body or another department
within the same organization. These two govern-
ance structures are called markets and hierarchies
respectively (Williamson, 1983). In the former case,
the governance structure is the contract, which is
aligned with the transaction. In the latter case, the
 The Governance of Organizational Project Management
governance structure is the hierarchy, which is
perpendicular to the transaction. Rodney Turner
and Anne Keegan (2001) showed that in the case
of projects, regardless of whether it is internal or
external supply, the governance structure is always
the project, which is the transaction. In the case of
external supply, the governance structure will also
include the contract, which will be aligned with
the project. In this section, we will talk as if the
contractor is an external supplier, but very similar
structures are adopted for one department supplying
another in the same organization (Turner & Keegan,
2001).
We identified four roles for the governance of
projects: the sponsor, the senior supplier, the project
manager, and the senior user or business change
manager. Rodney Turner and Anne Keegan (2001)
identified that the first three of these roles are
mirrored in the contractor, which they labeled the
broker, steward, and project manager.
Broker: This role mirrors the sponsor within the
contractor organization. He or she manages
the client account, and helps the client define
the business need, and identify the possible
project outcome and output. He or she negoti-
ates the contract with the client, and persuades
the contract organization that this is business
they want, and makes resources available for
the contract. The role also carries names like
account manager, sales manager, marketing
manager.
Steward: This role mirrors the senior supplier in
the client organization and may even fulfil that
role for the client organization. He or she man-
ages the front-end design of the project outputs
and the initial definition of the project process,
and so works with the broker in preparing the
tender for the contract and preparing the con-
tract. He or she will then identify a project
manager and project team to deliver the project
and will fulfil the program or portfolio manage-
ment role within the contract organization.
The role also carries names like solutions man-
ager, network coach, or project director.
Project manager: The project manager manages the
detail design and delivery of the project. He or she
fulfils this role within the contract organization.
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83
The client may have a project manager overseeing
the contractor’s project manager but, in this case,
the client project manager mirrors the contractor
project manager.
In Chapter 23, Rodney Turner and Laurence
Lecoeuvre describe project marketing. They
identify that contact between the client and
contractor starts before there is a project.
The broker will make early contact with the client
when the client first identifies that they have
a business need and are thinking about potential
solutions to it. The broker will help the client
define the goals and outcome of the project. But
as they move into defining the project’s output and
the potential project process, the broker will need
to involve the steward and, eventually, the project
manager.
Rodney Turner and Anne Keegan (2001) identi-
fied that the governance structure varies slightly
depending on the size of the client organization and
the size of the project (see Figure 6.6).
Some contractors will work for a small number of
large, dominant clients. This tends to be the case in
the heavy process plant industry. Other contractors
work for a large number of small clients. This tends
to be the case in the building and software indus-
tries. In the former case, the contractor dare not
upset the client because if they do, they will lose
a large proportion of their potential business. But
the client also dares not upset the contractor,
because in these industries there tends to be just
a small number of potential suppliers, and so if the
client loses one, they lose contact with a large
proportion of the potential competency for doing
their projects. In the latter case, there are a large
number of potential clients and a large number of
potential suppliers, and so relationships tend to be
much less respectful. Some contractors do large
projects for their clients and some do smaller ones.
Rodney Turner and Anne Keegan (2001) defined
“large” and “small” as relative to the contractor’s
total turnover, so contractors doing large projects
were necessarily doing a small number, and those
doing small projects were necessarily doing many.
Contractors doing large projects for large clients
were doing large, stand-alone projects. Contractors
doing small projects for large clients were doing
 84 Rodney Turner and Ralf Müller

Project
Management Program
Few/Dominant Isomorphic Management
Structures

Customers

Many/Subordinate Product Portfolio

Development Management

Few/Large Many/Small
Projects
Figure 6.6. Four governance structures for projects.

a program of projects for that client. Contractors
doing small projects for small clients were doing
a portfolio of projects for different clients. And
contractors doing large projects for small clients
were also doing a portfolio of projects.
In three of the four cases, the governance rela-
tionships were similar. The project manager worked
for the steward, who responded to the broker, who
was the interface with the client. The one exception
was large projects for large clients. The steward
would be a project director interfacing directly
with the client. The broker would be a sales
manager who would create the relationship, but
stand aside during project delivery. Deputy project
managers would work for the project director.
Rodney Turner and Anne Keegan (2001) suggested
the reason for this difference was a transaction cost
issue. The idea is to reduce the number of interfaces.
Where there are a large number of competence
pools and a large number of clients, there are
a large number of potential interfaces. There is
a transaction cost associated with each interface.
So the brokers deal with the clients to source the
business, and the stewards deal with the competence
pools to assemble the projects. When a broker
identifies a potential contract, he or she works
with the relevant steward to assemble the project
team. There is a cost associated with employing the
brokers and stewards, but the number of interfaces
is reduced to the sum of the number of competence
pools and clients rather than their product. When
there is a smaller number of clients and competence
pools, it is cheaper to have a direct relationship
between the steward and client and not employ the
broker.
Governance of the Investor’s
Investment Portfolio
Within any organization doing projects, there are (at
least) three primary levels of governance, two of
which we have already discussed. There is govern-
ance at the level of the company and, as far as that
relates to projects, it is the interest that the board of
directors takes in the projects, programs and portfo-
lios taking place within the organization. We called
this the governance of project management. Then
there is the governance of the individual project.
The third level is the governance of the investment
portfolio, linking the projects and programs taking
place within the organization to corporate strategy
(see Figures 6.4 and 6.8). Figure 6.7 illustrates that
portfolio and program management are key govern-
ance structures to roll out corporate strategy to the
projects the company is doing.
When we were describing the governance of
project management above, we said that efficiency
and effectiveness of the investment portfolio was
one of the key aims. Principle 2 stated that there
should be a coherent relationship between the
investment portfolio and corporate strategy. One

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 The Governance of Organizational Project Management
Corporate Portfolio
Strategy Objectives
Context
Portfolio Program
Strategy Objectives
Program
Strategy
Figure 6.7. The cascade from corporate strategy to project strategy
of the three functions of governance is to define the
objectives, and it is through its investment portfolio
that the investor translates its corporate strategy into
the objectives, or desired results, for its projects and
programs.
Rodney Turner (2014) suggests that there are five
elements of portfolio management:
1. maintain an inventory of all the projects and
programs taking place within the organization
2. track progress on all the projects and programs
3. select which new projects will be added to the
portfolio
4. share resources between the projects in the
portfolio
5. undertake a post-completion review of all pro-
jects and programs to ensure they achieved
their business objectives
Elements 1 and 2; they are self-explanatory.
We will discuss element 4 in the next section,
because it is more of a problem for a contracting
company. Here, we will discuss elements 3 and 5 in
the reverse order.
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85
Project
Objectives
Project Work area
Strategy Objectives
Team
Work area
Objectives
Strategy
Individual
Team
Objectives
Project strategy Strategy
Unfortunately, people are encouraged to be
economical with the truth at element 3, if they
want their pet projects adopted into the portfolio;
they are encouraged to inflate the potential benefit,
and understate the cost and potential risk.
If postcompletion reviews are not undertaken,
there is no check. Several years ago, Rodney
Turner worked with a UK bank, visiting them
twice, nine months apart. At the first visit, they
were not conducting postcompletion reviews, and
projects were repeatedly failing to achieve their
business objectives; they were costing more than
planned and not delivering their desired benefit.
When he returned nine months later, there was
a new CEO, and he had implemented postcomple-
tion reviews. People were held accountable if their
projects did not deliver the business objectives,
and woe betide anybody for whom it happened
twice. (Once is a mistake, twice a trend, and
three times a habit.)
Organizations should maintain a portfolio
committee to manage the adoption of new projects
into the project portfolio. The committee will meet
regularly, typically once in three months. Projects
 86 Rodney Turner and Ralf Müller
will be incorporated into the portfolio at their third
stage-gate. Stage-gate 1 is the concept, where the
sponsor first moots the idea that there is something
the organization can do to achieve business
performance. The economics department of the
Chinese government floats the idea that if the
traffic flowing across the Yangtze River can be
improved, it will encourage people to build their
factories on the north side of the river, leading to
economic development. The marketing depart-
ment suggests that if some marketing issues can
be resolved it could improve profitability. Stage-
gate 2 is completion of the feasibility study where
the sponsor and senior supplier show that the
preferred option is likely to produce the desired
output, outcome, and performance improvement.
The economics department and ministry of works
show that a bridge can produce the desired
increase in traffic flows at a reasonable cost; the
marketing department and IT department show
that a customer requirements management system
can lead to the desired improvements. Stage-gate 3
is completion of the front-end design. Sufficient
design is done to perform rigorous investment
appraisal, to show that the benefits can be
achieved at reasonable cost, with manageable
risk. A business plan is produced for the project.
A business case is produced for the project, and
principle 3 above was that this should be based on
relevant and realistic data. The business case
should show how the project will deliver corporate
objectives.
There will usually be more project proposals
than money and resources available, so a selection
has to be made. That will be done at the regular
meeting of the portfolio committee. Each project
needs to be awarded a score on how well its busi-
ness objectives match corporate strategy. Then,
based on the scores, projects will be added to the
portfolio until all the available money and
resources have been assigned to projects. Several
years ago, Rodney Turner worked with Reuters.
They would actually look at the next couple of
projects on the list, and decide whether they were
higher priority than projects already underway.
If so, the projects underway could get canceled,
and the new projects added to the portfolio. For the
remaining projects, it may not be the end of
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the road. The projects’ promotors may have the
opportunity to take the project away and try to
improve the business case, getting greater align-
ment to the corporate strategy. For other projects,
it just may not be the right time. A better time may
be six or twelve months later. But for many pro-
jects, they will now be stopped.
There is one more issue of importance at the
level of the investment portfolio. One function of
governance is defining the means of achieving the
objectives, and part of the means is ensuring that
the organization has the competencies it needs to do
the projects it wants to do. This is called developing
organizational project management capability. This
is dealt with in Chapter 11.
Governance of the Contractor’s
Portfolio of Projects
Element 4 of portfolio management above is
balancing the available resources between the
chosen projects. This is of particular importance
to contractors, especially contractors doing med-
ium-duration projects of three to nine months, for
whom the resource demands can fluctuate heavily.
The projects in the portfolio will be managed in
a similar way as above, except that the decision
to add projects to the portfolio will be taken at
a decision-to-tender meeting.
Criteria will include issues such as:
• The job is expected to make a profit.
• Do we want the business?
• Does it offer development opportunities?
• The job matches the firm’s competence and
capability.
• The firm has the capacity to do the work.
• The client is pleasant to work for.
• The contractual conditions are fair.
• The risk is acceptable.
Three types of manager are involved in balancing
the resource requirements: portfolio managers, pro-
ject managers, and resource managers. Portfolio
managers accept new projects into the portfolio.
They ask project managers to plan them and predict
the resource demands. Resource managers tell the
portfolio manager what the resource availability is.
 The Governance of Organizational Project Management 87

The project managers and portfolio managers create
a rough-cut capacity plan where they balance the
resource availability versus the resource demands.
Each project is given a time and resource window
within which it can take place. There are a couple of
points for the rough-cut capacity plan:
1. We suggest you maintain separate plans for
small, medium and large projects. John Payne
and Rodney Turner (1999) suggest that for
a given company, large projects will be ten
times the size of medium projects, and medium
projects ten times the size of small projects.
PRINCE2 (OGC, 2009) suggests each project
has a tolerance on its cost of between ±5 percent
and ±10 percent. That means the error on large
projects is equal to the size of medium projects
and ten times the size of small projects. Small
projects cannot compete alongside medium-
sized projects, and medium-sized projects
can’t compete alongside large projects.
Therefore, you need to create separate resource
pools for small, medium, and large projects,
and manage them in separate portfolios (as
shown in Figure 6.4).
2. The rough-cut capacity plan should contain
just a summary of each project, not the full
work breakdown. That is what “rough-cut”
means. Rodney Turner (2014) suggests that
each project is added to the rough-cut capa-
city plan as a single activity. We suggest that
this is what you do for small and medium-
sized projects. For large projects, you may do
the same, or add them at the work-package
level.
Rodney Turner (2014) first observed portfolios
being managed in this way in the ship-repair indus-
try. There it worked very easily. However, there
were two features of the projects which made it
easy. First, the workload was predictable years
into the future, so the dockyards knew what
resources they needed. Second, the projects all had
the same resource profile. So if you needed to move
one project to solve an overload in one resource,
you were solving an overload in all resources.
Contractors doing medium-sized projects, three to
nine months long, do not know what projects they
will be doing in six months’ time. Further, clients
want their job done now, so you cannot delay the
start of a project to solve a resource overload.
In addition, the resource profiles of different
projects can be quite different, so moving a project
to solve an overload in one resource may create
a bigger problem for another resource. Against this
background, contractors do not want to make people
redundant if there is a temporary downturn in the
number of projects being undertaken. It is expensive
to make people redundant just to re-recruit them in
six months’ time. For this reason, contractors tend
to use a large contingent of temporary staff. Anne
Keegan and Rodney Turner (2003) identified
that contractors can have between 20 percent and
40 percent of their staff as temporary workers, and
sometimes as high as 80 percent.
Project managers are responsible for managing
projects within the time and resource window they
are given. If things change, and they need more time
or resources, they must return to the rough-cut
capacity plan to negotiate more resources.
As projects progress, the project managers will
make demands on resources for the people. There
are two ways this can be done. Packages of work
can be transferred to the resource managers; then
the resource managers will be responsible for
assigning people to complete the packages of work
by the deadline. Or people are seconded from the
department onto the project, and the project man-
ager is responsible for coordinating the work of
different resources to complete the packages of
work by the deadline. Because of the magnification
of errors as elements are broken down into smaller
units, the balance in the rough-cut capacity plan
may be accurate to, say, ±5 percent, but the
demands the project managers are making on the
resource managers can still be out of balance to, say,
±50 percent. The resource managers have to balance
the demands.
Governance of the Network of Projects
The final organization that a project can be part of is
a network of projects. Governance through net-
works differs from that of markets and hierarchies
because, here, projects and relationships are

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 88 Rodney Turner and Ralf Müller
coordinated through social mechanisms, such as
trust, reciprocity, and partnership, which increase
in intensity with the extent of interaction in the
network (Jones, Hesterly, & Bogatti 1997; Powell,
1990). This differs from arms-length, price-driven
and often anonymous governance, as in markets; or
authority and control-driven governance, as in hier-
archies. The social mechanisms provide for reduc-
tion of transaction costs by restricting access to
those actors relevant for a project and safeguarding
of the exchange of members by establishing sanc-
tions for those who do not obey the culture of the
network (Jones et al., 1997).
Three forms of network governance are typically
found (Provan & Kenis, 2008):
• Shared network governance, where either all or
a significant number of the network members are
responsible for managing internal and external
relationships and coordinate actions. This is
most often found in networks with few members
of equal status, with high mutual trust and
consensus about the goals of the network.
• Lead organization-governed networks, where one
member of the network assumes a leadership role,
maybe because of a special skill set or experience,
or mandated from outside. This form of govern-
ance is most effective in networks of medium
size, with high levels of trust in the leading mem-
ber, as well as moderate levels of consensus about
the network goals.
• Network administrative organization, where
a separate organization governs the network,
including the relationships and activities of its
members. This approach reduces the complexities
stemming from the internal tension in the two
other network governance approaches and is
most effective in large networks, where the need
for coordination is high, the governance entity
is trusted, and a moderate consensus about the
network goals prevails.
As in the other governance approaches
described above, network governance can be inter-
nal or external to an organization. Internal net-
works may emerge in larger organizations, when
they deliver similar projects to the same customer,
but in different countries. The individual projects
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are governed by the respective country organiza-
tions of both buyer and supplier organization, but
the projects as such are networked because of
similarities in resource and/or technical
requirements.
In a related study on the governance of PMO
networks (where each PMO member can be seen
as a representative of the project he or she worked
on) Monique Aubry, Ralf Müller, and Johannes
Glückler (2012) identified three different relation-
ships between the network members:
• controlling relationship, where one member
executes management authority over another
member; for example, if the project manager of
one project audits the project manager of another
project
• partnership relationship, which is characterized
by collegial equality, such as when a member of
one project jointly works with colleagues from
another project to solve a shared issue
• serving relationship, where the member of one
project is contracted for or provides a service to
another project.
Each network member can take on a mix of these
roles, and thus appear differently to different mem-
bers of the network at different points in time.
The study showed that the partnering role provides
for the needed slack to explore new knowledge and
contribute to the learning within the network,
whereas both the controlling and serving role
exploit existing knowledge and contribute little to
the network-wide learning.
Through Social Network Analysis, Aubry, Müller,
and Glückler (2012) identified the communication
structures among and between project managers in
a network of internal projects in a pharmaceutical
company. Their study showed that project managers
prefer to communicate with those colleagues they
had worked with before, who are not necessarily the
most knowledgeable resource on a subject. It also
showed that project managers tend to communicate
in small clusters of preferred communication part-
ners, and that only those project managers who work
on many projects and developed an innovation in
their way of managing projects took the liberty to
communicate with peers in other clusters. Hence,
 The Governance of Organizational Project Management 89

information flows in project networks are limited Karlos Artto and Jaakko Kujala (2008) say that
largely to subnetworks of mutually trusted colleagues the key governance challenges are to maintain effi-
with a history of joint work. ciency and innovativeness in the network, and to
These two issues (little knowledge exploration position each firm in the value network. They say it
and limited communication) need to be addressed is important to define the appropriate governance
through adequate governance measures, such as mechanisms.
fostering of knowledge exploration through provi-
sion of “slack times,” and workshops for mutual
learning and development of shared mental models Conclusion
about the particular skills and experiences of
network members. This provides for more We have seen that a project is an organization
efficiency in information flow and effectiveness in within many other organizations:
communication with colleagues who are most
1. the investor: a permanent organization that
knowledgeable about a subject, who are not neces-
identifies the opportunity for making a change
sarily those known the longest time (Müller,
to achieve business objectives, and initiates the
Glückler, Aubry, & Shao, 2013).
project to make that change
Governance of networks of projects can also be
2. the investor’s portfolio of projects: a rolling,
external. For instance, when the European Space
annual, temporary organization through which
Agency is preparing a satellite, there may be
the investor makes all its business changes
a number of experiments on board, so there will be
3. the contractor: a permanent organization
several projects developing each experiment. Or when
which provides the investor with competen-
a city becomes the European city of culture for a year,
cies it lacks to enable it to undertake its
there may be a number of initiatives to prepare differ-
projects
ent events. Karlos Artto and Jaakko Kajula (2008)
4. the contractor’s portfolio of projects:
identify four types of project business against two
a permanent organization through which the
dimensions. The first dimension is one project-many
contractor manages the work it does for all its
projects, and the second dimension is one firm-many
clients
firms. One firm-many projects is the project-based
5. a network of projects: usually a temporary orga-
organization we considered first above. One
nization of several projects with a common
firm-one project is the single project we
objective.
considered second. One project-many firms is a joint
venture where many firms contribute to one project. All of these organizations and the interfaces
Here we consider many firms-many projects. between them require governance.
Karlos Artto and Jaakko Kujala (2008) identify Governance can be viewed as a control system,
several issues with the management of a network of a process or a set of relationships. These three
projects: views overlap. According to the OECD’s defini-
tion of governance, which we have adopted, there
(a) The participants may have competing objec-
are four functions of governance: to define the
tives; they can be partners on one project, and
objectives of the organization (or interface); to
competitors on another.
define the means of achieving those objectives;
(b) There can be different operating models
to define the means of monitoring progress; and
between business participants and non-
to manage the relationships between significant
business participants.
stakeholders;
(c) Participants from the public sector may be
more politically motivated. 1. In projects, we identified that the four functions
(d) Firms can participate in different projects in imply the four roles suggested by PRINCE2:
different roles, being the lead on one, and the sponsor, the senior supplier, the project
supplier on a second. manager, and the senior user.

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 90 Rodney Turner and Ralf Müller
2. In the interface between them we described the
eleven principles of good governance suggested
by the Association for Project Management, and
the responsibility boards of directors have to
assume for projects, programs, and portfolios
being undertaken by their organization.
3. One of the principles is the coherence of the
investment portfolio, and we showed how this
can be used to create a clear link between cor-
porate objectives and project objectives, so the
organization does the right projects to achieve
its corporate strategy.
4. To manage the interface with its client, the
contractor needs to mirror three of the four
governance roles on the project: the account
manager or broker mirrors the sponsor; the
solutions manager or steward mirrors the senior
supplier (or perhaps is the senior supplier); and
the contractor’s project manager mirrors the
client’s project manager.
5. In governing its project portfolio, the contractor
needs to ensure it has adequate resources to
do the contracted work for its clients, and to
manage that work to achieve the efficient and
effective completion of its clients’ work.
6. The project may be part of a larger network of
projects, and the relationships between the par-
ties involved in the network needs to be defined
for the efficient and effective achievement of
the objectives of the project network.
This chapter showed that governance is not lim-
ited to individual organizations, but is also required
for governing the interface between them.
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 CHAPTER
7
Project Portfolio Management
The Linchpin in Strategy Processes
JULIAN KOPMANN, ALEXANDER KOCK, and CATHERINE
P. KILLEN
Introduction
Project portfolio management (PPM) is a central
component of organizational project management
(OPM), especially through its role in both the
formulation and the delivery of organizational
strategy. Corporate activities are increasingly
carried out in the form of projects, in a trend that
has been called “projectification” (Midler, 1995).
In particular, for the implementation of complex
innovations, it is not enough for organizations to
focus on the successful management of individual
innovation projects; they must also manage a
large number of interdependent projects from
a portfolio perspective. In today’s dynamic envir-
onment, organizing by projects has become the
rule rather than the exception, and organizations
face challenges in managing these large project
landscapes (programs and portfolios).
The management of project portfolios is closely
linked to the implementation of strategies.
As strategies are ultimately implemented by pro-
jects, PPM – as a link between corporate strategy
and projects – plays a central role (Meskendahl,
2010). In most research and practice this role is
considered from a top-down perspective: strategies
are considered to be a given yardstick for the prior-
itization and selection of projects and the allocation
of resources. From such perspectives, PPM acts as
the recipient of strategic goals and requirements that
need only to be operationalized.
However, the strategic management literature
has long recognized the importance of emergent
strategy; and that the realized strategy (the strategy
that is actually implemented) often strays from the
intended strategy (Mintzberg, 1978). Surprisingly,
this is hardly considered in existing research models
92
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and standards for PPM (PMI, 2013). While there is
some empirical evidence to suggest that hierarchi-
cal, formal, top-down approaches are not the actual
practice of PPM (Christiansen & Varnes, 2009;
Jerbrant & Gustavsson, 2013; Martinsuo, 2013),
a much broader debate is needed to fully explore
the role of PPM in the context of emergent strate-
gies. The goal of this chapter is therefore to explore
the role of PPM in the relationship between the
formulation and implementation of strategy and
consider both the top-down approach as well as
the bottom-up strategy emergence. We first discuss
emergence in the context of strategy implementa-
tion and the role of different phases in the PPM
process that affect strategy implementation. After
a discussion of the current empirical evidence on
emergence in the context of portfolio management,
we suggest ways in which PPM can act as a strategy
“linchpin”; an essential organizational process to
connect and integrate both top-down and bottom-
up approaches in strategy implementation.
Strategy Formation and Emergence
Organizational strategy aims to underpin success
through the development and maintenance of com-
petitive advantages. In pursuit of such advantages,
strategic processes are used to determine objectives
and goals and to develop plans for their achieve-
ment. The strategy formation process is often repre-
sented in two stages in strategic management
literature. The first stage, strategy formulation,
receives the large majority of the attention and
research – this is the stage where organizations
weigh up the options and challenges and set goals
and objectives aimed to lead the organization to

success. The second stage, strategy implementation,
refers to the ways the strategy becomes a reality;
without effective strategy implementation, the
planned strategies will not be realized. Although
the importance of strategy implementation is well
recognized, it is often treated as an afterthought to
strategy formulation (Noble, 1999).
The theme of emergence has made a strong impact
on the field of strategic management ever since
Mintzberg’s seminal work on strategy formation
(Mintzberg, 1978). More generally, emergence refers
to the appearance of new, coherent, and unexpected
structures, patterns and characteristics at the macro-
level of complex systems that are caused by the
interaction of components at the micro-level
(Goldstein, 1999). Emergent phenomena have
features that are not observable in the individual
parts of the system (Akgün, Keskin, & Byrne,
2014; Beeson & Davis, 2000; Goldstein, 1999).
Therefore, they are neither predictable nor deducible.
They are based on self-organized behaviors through
which simple behavioral rules at the local level can
lead to very complex behaviors at the global level
(Goldstein, 1999). Emergence can occur in physical,
biological, technical, or social systems.
Organizations today face strategic challenges as
environments are increasingly characterized by
high levels of change; strategic evolution, often
led by emergent elements, is required to effectively
respond to this change. Emphasizing emergence in
organizations in the context of strategy formation,
Mintzberg and Waters (1985) address the discre-
pancy between strategic plans and intentions on
the one hand (strategy formulation) and what orga-
nizations actually do on the other hand (strategy
implementation). These two aspects of implemen-
ted strategy are referred to as the deliberate strategy
(implemented as intended), and emergent strategy
(realized despite planning or even in the absence of
plans). In addition, some of the intended strategy
may not be implemented – referred to as unrealized
strategy. Figure 7.1. illustrates these relationships.
While strategy formulation is a purely mental, plan-
ning activity, implementation reflects the process of
realization. Emergence, by definition, only occurs
in the context of implementation, since it is an
unexpected outcome.
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Project Portfolio Management 93
Emergent
Strategy
new
Deliberate
Strategy
Intended delivered
Strategy as planned
Unrealized
Strategy
not delivered
Figure 7.1. The relationship between intended and
realized strategy. Based on Mintzberg & Waters,
1985.
Although strategic plans are often made with
an assumption that the strategy will be fully and
deliberately implemented, this is very unlikely to
occur in reality. A perfectly deliberate strategy
implementation requires that strategic intentions
are fully developed and communicated, all organi-
zational actors are fully committed to implementing
the strategy, and there is no interference from
external forces. In today’s increasingly turbulent
environment, external change is especially likely
to affect the implementation of strategic plans.
Similarly, a purely emergent strategy is also highly
unlikely to occur, as that would indicate that inten-
tion had no role to play at all. Instead, it is the
combination of the two (deliberate and emergent
strategy) that is observed in practice. Mintzberg
and Waters (1985, p. 271) state it this way: strategy
formation “walks on two feet, one deliberate, the
other emergent.” This suggests that management
needs an ability to provide direction while simulta-
neously responding to change and emergence.
Other researchers use different terms for similar
concepts – for example, a commanding/directing
mode of top-down strategy implementation
combined with a generative/responding mode of
bottom-up strategy implementation is proposed to
lead to better outcomes than either mode on its own
(Hart, 1992).
To explore the concept of emergence, we now
turn our attention to strategy implementation in
 94 Julian Kopmann, Alexander Kock, and Catherine P. Killen
Strategy
Portfolio
Projects
Actors
Planned Emergent
elements elements
Figure 7.2. A project portfolio perspective of
planned and emergent strategic elements.
a project environment. In organizations, strategies
are typically implemented by projects; as the project
portfolio represents the sum of all projects, it there-
fore also represents the currently implemented strat-
egy (Morgan, Levitt, & Malek, 2007). Strategic
implementation through portfolio mechanisms is
characterized by high complexity and multiple inter-
element interactions – conditions that suggest an
environment ripe for the occurrence of emergence.
Individual projects and actors represent the main
elements or components of this system at the micro-
level (Goldstein (1999), and their interaction may
result in emergence on a higher portfolio and strategy
level. It should be noted that not every such interac-
tion leads to emergence; the interactions must also
have coherent structures. These structures, however,
are only visible from a higher level; a portfolio per-
spective can reveal how such micro-level elements
form higher-level structures from the bottom-up.
Therefore, the concerted management of these ele-
ments is best done from the portfolio level through
PPM mechanisms (see Figure 7.2.).
PPM is therefore often viewed as a bridge
between strategy formulation and its implementa-
tion (Meskendahl, 2010). The challenge of PPM lies
not only in the implementation of deliberate strat-
egy but also in the adequate handling, and indeed
enabling, of emergence. While planned strategies
are cascaded down through the hierarchy for
implementation, emergent strategy is realized by
the bottom-up interplay of different portfolio
elements (people and projects).
The project prioritization and selection phase
of PPM receives strong attention for its impact on
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Degree of Strategy Implementation
Business
Objectives
Project
Organizational Level
Portfolio Portfolio
Management Objectives
Program
Objectives
Project
Objectives
Figure 7.3. Cascade model. Extended from Morris
& Jamieson, 2005.
strategy (Archer & Ghasemzadeh, 2004; Blichfeldt
& Eskerod, 2008; Dietrich & Lehtonen, 2005;
Englund & Graham, 1999; Müller, Martinsuo, &
Blomquist, 2008). The cascade model of strategy
implementation is often portrayed as the mechan-
ism through which projects are selected to fit with
strategy through a traditional top-down approach
(see Figure 7.3.). This perspective focuses on the
realization of deliberate strategies, ignoring the
potential existence and impact from emergent
strategies.
The top-down cascade model is reflected in much
of the extant OPM research. Empirical studies con-
firm a positive relationship between strategically
aligned project selection and portfolio success
(Müller et al., 2008). Other studies have shown
that a formalized portfolio management process,
which is based on strategic planning, is also asso-
ciated with success, as it provides transparency,
facilitates coordination, and enables strategy to
guide project selection (Schultz, Salomo, de
Brentani, & Kleinschmidt, 2013; Teller, Unger,
Kock, & Gemünden, 2012). Finally, successful
portfolios are also characterized by clear objectives
for projects and formalized decision processes
(Martinsuo & Lehtonen, 2007).
The dominant view on PPM as represented by
these and other studies is driven from the top down
and ignores that strategy can also be emergent
(Mintzberg, 1978). In the next section we discuss
the PPM process and how it works with strategy

formulation and implementation in both a top-down
and a bottom-up manner.
Project Portfolio Management Process
A project portfolio describes a set of projects
that are executed by a particular organization
and compete for its limited resources in terms
of budget, personnel, and time (Archer &
Ghasemzadeh, 2004). It can be said that the pro-
ject portfolio represents the organization’s strat-
egy (Benko & McFarlan, 2003; Morgan et al.,
2007) as it is a collection of the projects and
programs that embody strategy realization.
The project portfolio processes also guide the
future implementation of strategy through
projects (Cooper, Edgett, & Kleinschmidt, 1999).
Therefore, the dedicated management of a project
portfolio is responsible for the prioritization of
projects and the respective allocation of scarce
resources in order to realize the most favorable
selection of projects for an organization
(Blichfeldt & Eskerod, 2008). In addition, PPM
refers to the continuous and overarching coordi-
nation and steering of the project portfolio.
In that regard, the management of a project
portfolio can provide benefits (e.g., exploitation
of synergies between projects and management of
portfolio risks) that would not occur in the case of
independently managed projects (Teller & Kock,
2013).
Scholars often adapt a process model for describ-
ing portfolio-related management activities (e.g.,
Blichfeldt & Eskerod, 2008; Thiry & Deguire,
2007). Such process models typically highlight the
role of project prioritization and selection and the
ongoing coordination of the portfolio of projects.
In this chapter, we follow the model by Jonas (2010)
that comprises four phases (see also Beringer,
Jonas, & Kock, 2013; Jonas, Kock, & Gemünden,
2013; Meskendahl, 2010): (1) Project portfolio
structuring; (2) Resource allocation; (3) Project
portfolio steering; and (4) Project portfolio exploi-
tation. This varies from other models by including
a fourth phase, which comprises the post-project
activities and emphasizes the exploitation of
project results (Jonas, 2010). One weakness of
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Project Portfolio Management 95
phase-based process models is that they tend to
suggest a static view of the life cycle of projects;
however, project portfolios are highly dynamic
entities (Floricel & Ibanescu, 2008; Petit, 2012).
New project opportunities and proposals are
constantly popping up while the scope and
urgency of ongoing projects may change at any
time. Changing strategic objectives and the
impact of a volatile environment can alter the
priority and purpose of projects while other
projects may become obsolete. As a consequence,
aspects of PPM referring to the inflow of
projects, to the continuous management of the
stock of projects, and to the outflow of projects,
need to be performed simultaneously and con-
stantly. In the following sections, we highlight
the main activities, challenges, and contributions
of the four phases of PPM on strategy
implementation.
Portfolio structuring comprises activities that
precede the execution of projects. The main chal-
lenge of this phase is to define a portfolio of project
investments that in its entirety optimally reflects the
strategic objectives while also considering the con-
straints of the funding organization.
This requires:
• management of the inflow of project ideas and
proposals (Heising, 2012; Kock, Heising, &
Gemünden, 2015; Kock, Heising, & Gemünden,
2016)
• prioritization and balancing between multiple
potentially contradicting goals, aiming for strategic
alignment, maximal revenues, and a balanced port-
folio of risks (Cooper, Edgett, & Kleinschmidt,
2001; Meskendahl, 2010)
• management of dependencies on the internal and
external environment and between projects
(Archer & Ghasemzadeh, 1999; Killen, 2013;
Killen & Kjaer, 2012; Platje, Seidel, &
Wadman, 1994)
• integration of input from relevant stakeholders
such as the project customers (Voss, 2012;
Voss & Kock, 2013)
As a result, a portfolio of preferred project invest-
ments is selected from a wide range of project ideas
that have gone through a comprehensive evaluation
and prioritization. In sum, this selected portfolio
 96 Julian Kopmann, Alexander Kock, and Catherine P. Killen
represents an interpretation of a top-level strategy
that is used to derive project initiatives and to
challenge and evaluate upcoming project ideas.
Thus, from a strategic management perspective the
selected portfolio represents the nexus between
strategy formulation and implementation. On the
one hand, it drives strategy formulation by inter-
preting the strategy, concretizing it to project
evaluation criteria or by defining strategic bucket.
On the other, the actual selection of projects repre-
sents the first step of the implementation of the
intended strategy. However, it is not all top-down,
and in this phase we also observe the influence
of bottom-up elements (e.g., due to operational pro-
blems that require solutions or new project ideas
that are not in line with the overall strategic
direction).
Resource allocation refers to the distribution of the
organization’s resources across the projects in a way
that reflects the organization’s priorities. The main
challenge of this phase stems from the tension
between the line organization that provides the
resources and the project organization that requires
the resources (Arvidsson, 2009). The optimal utiliza-
tion of resources requires the transparency of their
availability and competences, a clear strategic focus,
and a commitment to organizational goals that
prevent opportunistic behavior (Elonen & Artto,
2003; Engwall & Jerbrant, 2003). Another challenge
is indicated by issues at the individual level.
Project members often lack the long-term perspec-
tives and career systems that a single project
environment cannot provide while their allocation
to multiple projects often leads to an overload of
project work (Huemann, 2010; Zika-Viktorsson,
Sundström, & Engwall, 2006). Organizations that
successfully address these challenges provide
the basis for the efficient implementation of the
portfolio of project ideas.
The impact of the resource allocation phase on
the strategy formation process is twofold. First, it
provides the basis for the efficient implementation
of the entire portfolio of project ideas according
to the organization’s priorities and thereby
concretizes the intended strategy that is inherent
to the project ideas in funded and staffed projects.
It paves the way and defines the frame for strategy
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implementation. Second, in the resource allocation
phase, the commitment of the (resource-owning)
middle management (typically in the line organi-
zation) to the strategy is revealed. In some cases,
the lack of resource commitments to support stra-
tegic decisions have been seen as a major source of
emergent strategies (Burgelman, 1994).
Portfolio steering comprises all activities that are
related to ongoing projects. Through continuous
coordination and control activities, PPM provides
mechanisms for response to changing organiza-
tional priorities, project plan deviations, and/or
risks and opportunities (Korhonen, Laine, &
Martinsuo, 2014; Müller et al., 2008; Teller &
Kock, 2013). In doing so, this phase addresses
challenges that stem from a dynamic external and
internal environment and enables an organization
to adapt to changing conditions. Scholars also
emphasize the importance of the exploitation of
synergies among projects regarding the availability
of information, or the mutual utilization of tangible
or intangible assets (Canonico & Söderlung, 2010;
Platje et al., 1994).
The strategic relevance of this phase is, again,
twofold. First, portfolio steering can provide stra-
tegic control functions to ensure alignment with
strategy and to manage uncertainty (Korhonen
et al., 2014). Second, a portfolio perspective of
current projects can create and reveal strategic
opportunities that emerge within the strategy
implementation (Kopmann, Kock, Killen, &
Gemünden, 2017).
Portfolio exploitation activities refer to the
project closure and the post-project phase.
The scarce literature on PPM regarding this
phase particularly highlights the relevance of
organizational learning through “lessons learned”
and the evaluation of project results (Kopmann,
Kock, Killen, & Gemünden, 2015; Prencipe &
Tell, 2001; von Zedtwitz, 2002). This phase is
also highly relevant, from a single-project per-
spective, on benefits realization (Winter &
Szczepanek, 2009). Scholars distinguish three
stages in the process of value realization: output,
outcome, and benefit (Turner & Zolin, 2012;
Winter & Szczepanek, 2009; Zwikael & Smyrk,
2012). Accordingly, the immediate results of

a project (i.e., artifacts produced by the project)
are defined as output. Projects are typically con-
cluded when these outputs are delivered.
However, the utilization and exploitation of these
outputs is required to realize an outcome. Finally,
benefits are described as the “flow of value that is
triggered by the realization of a target outcome”
(Zwikael & Smyrk, 2012, p. 11). Following this
rationale, the actual realization of a strategy takes
place in the exploitation phase, after the delivery
of outputs.
Thus, the main challenge in this phase is to
bring together the puzzle pieces that are repre-
sented by the single project (selected in the
portfolio structuring phase), from the perspec-
tives of both deliberate and emergent strategies
to fully understand and manage portfolio
exploitation.
Deliberate strategies are based on the one
intended strategy concept, formulated in the
beginning of the strategy formation process.
As shown in Figure 7.2, the strategy cascades
down into many micro-level elements. In the port-
folio exploitation phase, these elements need to be
brought together so that, from a “big picture,”
portfolio-level perspective, the strategy imple-
mentation can best be recognized (and validated).
However, emergent strategies also stem from mul-
tiple micro-level elements and realized strategy
can only be fully recognized from an ex-post
perspective, when patterns across these elements
can be observed. The interplay between the top-
down and bottom-up strategy processes contri-
butes to a feedback loop where the formulated
intended strategy evolves in response to
emergence (Mintzberg & Waters, 1985). It is at
the portfolio perspective, and through PPM pro-
cesses, that patterns of emergence come to light,
and influence the ongoing (re)formulation of
intended strategy.
Each of the four phases that have been discussed
represents an essential and necessary part of PPM.
Even though the phases overlap in practice, with
activities often performed simultaneously, they are
logically consecutive from a strategy perspective fol-
lowing the classical concept of deliberate strategy.
This perspective also leads to a limited view of PPM
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Project Portfolio Management 97
as largely focused on the selection of the right
projects.
This notion is also reflected in the widely
acknowledged definition of project portfolio
success, in which success is equated with the
expected value of a portfolio of project invest-
ment options. As a consequence, scholars in
PPM tend to focus on activities that are related
to the operationalization and implementation of
intended strategies, while its actual contribution
to the bottom-up/emergent strategy formation is
widely neglected. Thus, when revisiting the role
of PPM in the strategy formation process, the
understanding of portfolio success also needs to
be challenged.
The strategic aspect of project portfolio success
is traditionally seen in the implementation of the
firm’s strategy through portfolio structuring,
resource allocation, and steering processes
(Morris & Jamieson, 2005). This view focuses on
ensuring that project selection and resource
allocation are aligned with the firm’s strategic
objectives and priorities in a top-down manner.
Beyond that, successful PPM reconfigures the
project portfolio through project reprioritization
and termination to enforce strategic fit (Unger,
Kock, Gemünden, & Jonas, 2012).
However, although strategic fit is one of the
most prevalent success criteria for PPM, it only
represents one side and ignores PPM’s wider
influence on strategy. In the end, it is the realized
strategy that determines organizational success
regardless of the degree to which it stems from
intended top-down strategy or from emergent
elements. To better understand the importance
of emergence and the ways that PPM enables
recognition of bottom-up emergence, we review
the concept of emergence and emergent strate-
gies from a PPM perspective in the following
section.
Evidence of Emergence in Project
Portfolios
Although the planning-based perspective dominates
the literature on PPM, some qualitative studies give
 98 Julian Kopmann, Alexander Kock, and Catherine P. Killen

first indications of the importance of emergent
phenomena:
• Burgelman (1983) identified autonomous stra-
tegic behavior as a source for strategic projects
that are out of the organization’s current stra-
tegic scope when initiated. Further, he proposes
that strategy may follow autonomous strategic
behavior when the middle managers make
sense out of these initiatives and manipulate
the strategic context accordingly. More expli-
citly, Mirabeau and Maguire (2014) explored
several autonomous strategic projects that
have led to emergent strategies and identified
three aspects that foster the transition from
autonomous strategic projects to emergent stra-
tegies: (1) Mobilizing wider support for
impetus; (2) manipulating strategic context for
consonance; and (3) altering structural context
for embeddedness.
• Loch (2000) and Blichfeldt and Eskerod (2008)
found that formal PPM is often only applied to
specific projects, while many projects are exe-
cuted outside formal decision-making processes.
These unrecognized projects consume important
resources and have a large impact on other pro-
jects. This suggests that emergent projects can
present unresolved challenges to established man-
agement systems.
• The investigations of Petit and Hobbs (2010) and
Petit (2012) show that project portfolios are – due
to high project interdependence – greatly affected
by variations in project objectives, customer
requirements, and target customers during the
course of individual projects. Similarly, managers
are often unaware that risks of individual projects
may aggregate at the portfolio level or that risks of
individual projects may represent opportunities
for other projects (Olsson, 2008; Teller, 2013).
Many changes and unexpected events lead to
unavoidable unpredictability, which is generally
not well catered for in current portfolio manage-
ment approaches.
• In a case study of a pharmaceutical company,
Aaltonen (2010) identified evolutionary pro-
cesses of variation, selection, and retention in
project portfolios. These evolutionary processes
can lead to path dependencies in portfolio
decisions, resulting in co-selection where project
selection according to certain criteria also results
in unwanted aspects at the same time. Such evo-
lutionary and unplanned developments (i.e.,
emergent strategy) are therefore shown to have
strong implications for the entire portfolio.
• Bootlegging describes secretly organized innova-
tion projects that ignore management directives.
Hence, they are not under the control of portfolio
management and do not follow the top-down
defined selection process. Augsdorfer (2005)
defines bootlegging as an activity that usually
emerges bottom-up and might be beneficial for
the firm. Augsdorfer’s empirical study revealed
that bootlegging takes place in R&D departments
across multiple industries and primarily involves
incremental innovations, which are eventually
aligned with the corporate strategy and support
the organization’s goals. Hence, he argues that
bootlegging is not only valuable commercially,
but also in terms of strategic success.
• Midler’s study of the development of the Renault
Logan (2013) reveals the high relevance of emer-
gent strategies for firm success in a multiproject
environment. The case describes how an extre-
mely successful strategy can develop evolutiona-
rily through complex learning relationships
among a series of interdependent projects. This
strategy formation called “Lineage Management”
describes a dialectic interplay between strategy
formulation and implementation through
a sequence of projects (Midler & Silberzahn,
2008).
Other case studies also remind us that idealized
project portfolio processes may not be in accor-
dance with actual practice. Christiansen and
Varnes (2009) observe that portfolio decisions are
not necessarily made according to established rules
and criteria, but instead rely strongly on negotiating,
bargaining and intuition. Similarly, Jerbrant and
Gustavsson (2013) demonstrate that the behavior
of managers in PPM is often characterized by
improvisation and does not necessarily reflect
rational decision making. Kester, Griffin, Hultink,
and Lauche (2011) identify that strong power-based
and opinion-based decision-making processes are
used in portfolio management, instead of the

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expected (and usually stipulated) evidence-based
decision-making processes. Mosavi (2014) shows
that portfolio management steering committees not
only include a decision-making function as part of
the established PPM approaches, but that they also
include a communication and negotiation function
that is not often formally recognized. A case study
in the public sector (Young, Young, Jordan, &
O’Connor, 2012) shows that despite adoption of
“best practice” PPM approaches, the majority of
projects contributed little to achieving strategic
objectives, casting doubt on the suitability of cur-
rent PPM approaches.
Discussion and Suggestions
for Managing Emergence through PPM
We have shown how PPM is influenced by, and
influences, both deliberate and emergent strate-
gies. We have analyzed this relationship from
a process perspective and have summarized
empirical findings. Drawing upon our analysis of
the findings, we now turn to the future to discuss
how organizations might deal with emergent strat-
egy implementation.
We offer three suggestions on how PPM can be
adapted to recognize, allow, and foster emergence.
We propose that managers: (1) recognize the value
of emergence and consider adopting mechanisms
for “planned emergence” via strategic control; (2)
manage the grassroots of strategy and foster bot-
tom-up initiatives to allow for emergent elements;
and (3) consider the wider role of PPM in two-way
strategy processes and the need to adapt PPM suc-
cess measures accordingly. We then explore each of
these suggestions on how organizations can best
build on and manage emergence through PPM.
Implementation of Mechanisms
for “Planned Emergence” via Strategic
Control
In recognition of the importance of emergent strat-
egy for organizational response to change, we turn
to mechanisms within PPM that can help to manage
emergence. The concept of “managing emergence”
may seem counterintuitive, as one of the defining
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Project Portfolio Management 99
features of emergence is that it is not planned.
However, as highlighted by Mintzberg and Waters
(1985, p. 271), “[i]t is important to remember that
emergent strategy means, not chaos, but, in essence,
unintended order.” This suggests that emergence
itself can be guided or steered, in a process some-
times called “planned emergence” (Grant, 2003;
Levina & Su, 2008). A study of portfolio-level
managerial controls reveals how such controls aid
in the management of uncertainty and suggests that
they can improve organizational ability to meet
strategic objectives (Korhonen et al., 2014).
We propose that strategic control mechanisms
implemented at the portfolio level can play a role
in managing emergence.
Strategic controls can take the form of diagnostic
controls or interactive controls (Simons, 1995).
While diagnostic controls have a role in motivating
and rewarding strategic achievements, it is the
interactive controls that are most relevant to
managing emergence. Interactive controls provide
a framework that allows for incremental and emer-
gent strategy formation, facilitates learning, and
addresses uncertainties that could affect the basis
of competitive advantage (van Veen-Dirks & Wijn,
2002). Such interactive controls can provide
a “means for surfacing and acting upon emerging
strategies” (Osborn, 1998, p. 488).
Schreyögg and Steinmann (1987) propose three
steps for strategic control: premise control refers to
the ongoing verification of assumptions; implemen-
tation control monitors the actuality of strategy
via currently implemented and pursued strategic
directions; and strategic surveillance scans the
environment to “sense” elements (Schreyögg &
Steinmann, 1987, p. 97; Teece, 2009). In contrast
to approaches that see strategy formulation, imple-
mentation, and evaluation as distinct sequential
activities, Schreyögg and Steinmann show how
mechanisms can simultaneously provide strategic
control while also acting as a countervailing
force to strategic planning (Band & Scanlan, 1995;
Goold & Quinn, 1990; Preble, 1992; Schreyögg &
Steinmann, 1987). They promote a feed-forward
concept where the ongoing monitoring of environ-
mental change is used to anticipate the appearance
of emergence (Schreyögg & Steinmann, 1987), and
 100 Julian Kopmann, Alexander Kock, and Catherine P. Killen
to anticipate their effect on the intended strategy
(Preble, 1992).
Management may find benefits and support for
emergence from implementing strategic controls at
the PPM level to review strategy while also support-
ing and promoting reformulation of strategy.
The goal is to provide a mechanism for monitoring
change to enable the identification of situations that
may call for emergent strategies, help steer the emer-
gence, and finally, from a portfolio perspective, to
recognize patterns of emergence as they occur.
Managing Emergence from Bottom-Up
Initiatives
Emergence stems from the unplanned behavior
of actors on an operational level. Coordinating
emergence can take the form of an active role in
attempting to channel emergence, or a slightly less
proactive approach that accepts emergent ele-
ments while providing leeway and empowerment
to foster emergent strategies. Examples of initia-
tives that seek to gain benefits from bottom-up
emergence demonstrate a combination of accep-
tance and fostering of emergence along with
approaches to channel or guide the emergence to
achieve success:
• Decentralized project selection accepts emer-
gence by instituting, for example, idea markets
for project prioritization that attempts to channel
this emergence by adopting a stock exchange
logic (Soukhoroukova, Spann, & Skiera, 2012),
where project ideas are treated like virtual stocks
employees can invest in. In the end, the market
value of the virtual stock creates a form of
“channeling” to determine the priority of a project
idea. Microsoft is using such techniques (Dahan,
Soukhoroukova, & Spann, 2010).
• Decentralized resource management that allows
employees to self-allocate to projects also provides
a way to accept and channel emergence. In this
way, the most attractive project will attract the best
resource pool and will have a better chance of
success – the emergence is accepted by the creation
of such structures, and the channeling is based on
the employee’s perspectives, which can evolve to
represent organizational goals.
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• In order to simultaneously allow for emerging
elements while also channeling and exercising
control, a combination of open and closed action
strategies may be useful (Gebert, Boerner, &
Kearney, 2010). Open action strategies promote
knowledge and idea generation (increased varia-
bility), whereas closed action strategies enhance
knowledge integration (increasing alignment).
For example, in a PPM context, Kock et al.
(2015) showed that organizations that foster
a climate of creative encouragement (open action
strategy) and simultaneously formulate a clear
ideation strategy and install clearly specified eva-
luation processes (closed action strategies) per-
form better than organizations that only follow
either an open or a closed action strategy.
• Emergence may be fostered and accepted by
strengthening the autonomy and power of
middle managers and project managers by
giving them more voice (Hirschman, 1970).
Voice behavior is defined as “discretionary
communication of ideas, suggestions, concerns,
or opinions about work-related issues with the
intent to improve organizational or unit func-
tioning” (Morrison, 2011, p. 375). Promoting
voice behavior of project managers could
enhance organizational effectiveness by foster-
ing constructive emergence of issues regarding
opportunities and threats alike. Ekrot, Rank, and
Gemünden (2016) show that project manager’s
voice behavior is positively affected by idea
encouragement, career perspectives, qualifica-
tion opportunities, and peer collaboration, but
only if project managers have a high level of
self-perceived competence and importance
for the organization (i.e., organization-based
self-esteem).
• Institutionalized bootlegging promotes emergence
by allowing employees to freely choose how to
spend 10 percent to 20 percent of their work time
(e.g., Google or 3M) for innovative projects.
Promising projects can then be channeled through
additional encouragement or funding.
Management of OPM may be enhanced through
the use of these types of combinations of
approaches to accept, empower, and channel
emergence.
 Project Portfolio Management 101

Adjust Project Portfolio Success Metrics We propose two approaches for considering ways
to adjust PPM success measures to reflect the fact
Commonly used measures of PPM success largely
that strategies are both deliberate and emergent.
stem from the traditional top-down view of strategy
One approach is to measure the actual quality and
implementation. In recognition of the role of emer-
success of the realized strategy, recognizing that
gence in strategy processes, we propose that there is
success may take many forms, and that the achieve-
a need to review and adjust PPM success measures
ment of success is not dependent on whether the
to ensure they reflect the wider role of PPM in the
strategy is emergent or deliberate. The second
strategy process.
approach is to separately evaluate the degree of
According to the traditional definition of Cooper
successful implementation of intended strategies
et al. (2001) that is still widely used (e.g., Kester,
(through measuring strategic fit) and the degree
Hultink, & Griffin, 2014), project portfolio success
of success in managing emergent strategies (i.e.,
is based on three elements: maximizing the project
recognizing emergent patterns and fostering
portfolio’s value; linking the portfolio to the firm’s
their grassroots). The two approaches can work
strategy; and balancing the portfolio. Based on this
together and complement each other. While the
definition, Kester et al. (2014) empirically investi-
first approach aims to provide a direct measure
gated the impact of portfolio success on market
of strategic success, it depends on the reliable
performance. The only element of portfolio success
measurement of the actual quality and success of
that was found to contribute to market performance
the strategy. The second approach offers a more
in terms of profit and market effectiveness was
detailed understanding of the nature of the strategy
maximal value, while strategic alignment contribu-
implementation and the degree to which the realized
ted only to customer satisfaction and portfolio bal-
strategy reflects emergent and deliberate processes
ance had no direct effect on market performance at
but does not attempt to measure the actual quality
all (Kester et al., 2014). These results suggest that
and success of the strategy. An empirical analysis of
Cooper et al.’s definition of project portfolio suc-
the two approaches may also reveal under which
cess may not provide a sufficient perspective to
circumstances a deliberate or an emergent strategy
determine how strategy realization translates to the
leads to more success.
bottom line.
This is an area of evolution and ongoing improve-
However, in the field of PPM research, several
ment; the development of adjusted PPM success
additional elements of portfolio success have been
measures will assist managers and academics in
developed. For example, Jonas et al. (2013) aug-
continuing to learn more about the management of
ment traditional project success measures (time,
emergent strategy processes.
cost, scope) with measures of customer satisfaction
and the level of exploitation of synergies between
projects. Heising (2012) and Voss (2012) applied Conclusions and Future Research
a comprehensive definition of portfolio success
by including a measure of future preparedness In this chapter, we have shown that emergence is
(building on the work of Shenhar, Dvir, Levy, & unavoidable in strategy implementation and thus
Maltz, 2001), to evaluate the long-term benefits and should be considered in OPM. The question is
opportunities offered by projects. not whether we need to manage emergence, but
These evolutions in the ways that PPM success rather how to do it: fight it or embrace it. Modern
can be conceptualized have widened the view of organizations have established less hierarchical
the role of PPM; however, there remains room for structures, more participative decision processes,
improvement. The examples of emergence in OPM and a culture of open discussions across all man-
show that emergence is not merely a deviation from agement levels. Why have they done so if not for
the plan (which is generally considered as negative), the sake of bottom-up initiatives? The success of
but that, if properly managed, emergence can have these organizations indicates that they were right
a positive impact on a firm’s success (Midler, 2013). to do so. However, the main challenge is to find

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 102 Julian Kopmann, Alexander Kock, and Catherine P. Killen
the right balance between a strict and potentially
more efficient top-down approach for strategy
implementation and a more open and emergent
approach where constant change could undermine
the decision process. One avenue for future
research could be to address this challenge and
provide further guidance on the right balance
through in-depth studies in a variety of environ-
ments. Such research could investigate whether
and how PPM and portfolio-level mechanisms
foster emergence, and whether particular contexts
influence the effect.
By proposing PPM as the linchpin between top-
down and bottom-up strategy processes, we demon-
strate that this challenge can be addressed by
a dedicated organizational function. Further, we
have highlighted measures that complement the tra-
ditional approaches to managing project portfolios
that focus on the implementation of intended stra-
tegies. Finally, we have called for a rethinking of
project portfolio success measures – advocating that
current approaches are extended to incorporate both
the deliberate and emergent elements of successful
strategies.
The importance of emergence is beginning
to be recognized in OPM research. While the
relevance of emergent strategies is widely acknowl-
edged, there is a need for further research to provide
clear managerial recommendations. By highlighting
PPM’s central role in managing emergence, we
promote a discussion that will pave the way for
further research as well as practitioner-relevant
insights. Improving the ways that PPM can better
support, and perhaps even guide, emergence is
especially important due to the role of emergence
in organizational responsiveness to meet changing
conditions.
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 CHAPTER
8
Program Management
PEERASIT PATANAKUL and JEFFREY K. PINTO
1 Introduction
Programs, within public and private organiza-
tions, are commonly viewed as a critical means
for instituting organizational change, developing
new products, processes, and services, and allow-
ing firms to maintain a technological or innovative
edge in the marketplace. Programs may be used
to support broad societal initiatives, including
critical electronic and physical infrastructure
development, energy exploration and conserva-
tion, sustainability activities, and logistics and
transportation, as well as narrower (but no less
relevant) efforts within a host of project-oriented
industries, including pharmaceuticals, aerospace
and automotive, oil and gas, and so forth. In fact,
the use of programs is typically viewed as a critical
element in organizational success. Organizations that
are especially adept at program management often
can leverage these abilities to enjoy real, sustained
competitive advantage over their rivals.
The critical nature of effective program manage-
ment is illustrated by the budgets being devoted to
supporting these initiatives. Hexter and Mischke
(2013) report that a worldwide demand for more
than $57 trillion to be spent on infrastructure from
2013 to the 2030s. Further, 41 percent of the world’s
capital investments is in projects (Morris, 2013).
Massive programs continue to capture the public’s
attention. The coordinated efforts to map the
Human Genome, travel to Mars, search for Zika
virus treatments, and even develop Lockheed
Martin’s Joint Strike Fighter (at a current budgeted
cost of $400 billion, with replacement parts and
future development, some critics suggest it will
become the first trillion dollar defense program)
are all examples of the types of high-visibility pro-
grams that capture the public’s attention, pointing
directly to our almost limitless capacity to find new
106
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ways to change our world and alter the manner in
which we live our lives.
At the same time, while it is being acknowl-
edged just how important project, program,
and portfolio management are to organizational
success, independent measures suggest that the
wider set of international organizations them-
selves engaged in project-based work are often
behind the expertise curve when it comes to mana-
ging their projects. The Project Management
Institute’s “Pulse of the Profession” (PMI, 2016)
reports that less than 17 percent of the organiza-
tions surveyed had high project management
maturity levels. Only 12 percent reported high
maturity in portfolio management, as well.
The net effect, as the PMI report suggests, is that
it puts significant project investment dollars at
risk with each new project or program undertaken.
Its research suggests that due to outright project
failures (budget dollars lost), combined with
“completed” projects that fail to reach their origi-
nal goals, for every billion dollars invested in
projects, $122 million is at risk. Similarly, the
Chaos Report (2014) notes that the success rates
for IT projects remain depressingly low (around
16 percent), with fully 84 percent of the projects
sampled reporting either severe challenges (over-
budget or behind schedule and suboptimal
functionality) or outright failure. Tellingly, the
broader industry has maintained those failures
rates for nearly twenty years. These data naturally
beg the question that will be addressed in this
chapter: what is the nature of program manage-
ment, why is it so critical to project management
success, and what are some of the important
challenges and best-practice guidelines that
researchers and practitioners alike can glean
from the current state of the field in order to better
manage their projects?
 Program Management 107

2 Program: Definition and Conceptual assigned, projects within the program can begin
Clarity at any time (PMI, 2013). The development effort
of the program starts when these projects go
2.1 What Is a Program? through their execution phase. The projects them-
selves typically end prior to the formal ending of
In the context of project, program, and project
the larger program, which may involve more sign-
portfolio management, the International Project
offs or political closure gates. The product of these
Management Association (IPMA) defines
projects is integrated into the final product being
a program as “a set of related projects and required
developed by the program. Often, a significant
organizational changes to reach a strategic goal and
amount of program work occurs during the inte-
to achieve the defined business benefits” (IPMA,
gration effort when multiple deliverables from
2006). Similarly, the Project Management Institute
multiple projects are tied together into a final inte-
(PMI) refers to a program as a group of related
grated product (PMI, 2013). Integration testing
projects, subprograms, and program activities that
must then be done to ensure that different program
must be managed in a coordinated way in order to
components work together as a unified system to
achieve benefits that may not be obtained if they are
deliver program benefit. For example, in large
managed individually (PMI, 2013). Similar to pro-
avionics programs, such as development of air-
jects, programs are a means of achieving goals and
borne stealth technology, multiple electronic sys-
objectives of an organization. The accomplishment
tems are developed by a broad array of
of the stated business objectives or goals is the
subcontractors and one of the critical duties of
overriding objective of a program. While the
the primary contractor is to ensure the farmed-
benefits from the program often comes at the end
out projects work together when fully integrated.
of the program development cycle, multiple
Consider the US Navy’s abortive, multibillion
discrete projects within a program can incremen-
dollar Expeditionary Fighting Vehicle program,
tally deliver benefits prior to the end of the pro-
finally shut down in 2011. Oversight committees
gram. For example, the large infrastructure
cited its inability to integrate and fully support the
program that developed Hong Kong’s interna-
myriad new systems developed to accomplish its
tional airport involved reclamation of land on
role.
Chek Lap Kok island, a rail spur for passenger
PMI suggests that a program typically go through
travel, bridges, and a small-scale city adjacent to
three phases in its life cycle. They are: program
the island, to house the airport’s employees and
definition, program benefits delivery, and program
families. Each of the subelements of this massive
closure (PMI, 2008). Program definition empha-
program contained one or more projects that had
sizes the analysis and understanding of the strategic
its own benefit to the population at large.
benefits of the program, the development of a plan
Within an organizational setting, programs can
for program initiation, the identification of the
themselves be parts of a larger project portfolio (see
program objectives and their alignment with the
Figure 8.1). In essence, a project portfolio is
organization’s goals, and the development of
a collection of projects and programs that are
a high-level business case demonstrating an under-
grouped together to facilitate their effective
standing of the needs, business benefits, feasibility,
management in order to meet strategic business
and justification of the program. The program
objectives. Within a broad strategic portfolio,
definition phase also includes the development of
projects or programs may not necessarily have
a way to structure and manage the program to
interdependency or direct relationships.
deliver the desired outcomes. The program plan is
Similar to a project, a program has a life cycle.
developed and key program deliverables are defined
A typical program goes through an initiation
in this phase. Program benefits delivery focuses on
effort, a development effort, and an end. After
the management of the development of the discrete
a program begins, marked by either funding
program benefits from subprograms, projects, or
approval or when the program manager is
program activities to achieve overall program

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Multiple Project Management (MPM)

Project and
Project Portfolio Management (PPM) program
management-not
managed as parts
Program Management* Single-project Management of a Group of
of portfolio
Management Multiple Projects (MGMP)*
(SPM) Program 3
Program 1 Group 1 Group 2
Subproject 1
Subproject 1 P Subproject 2
Subproject 2 P P
P P 1 2
Subproject 3 Program 2 1
1 P 2 P
P 6
Subproject 1 2 P 5
Subproject 2 3
P
3 P
4 Group 3
* All subprojects in each * All projects in each group are
program are goal-related not necessarily goal-related P P
1 2

Figure 8.1. A possible management setting in an organization.

Adapted from: Patanakul, P. & Milosevic, D. Z. (2009). The effectiveness in managing a group pf multiple projects: Factors of influence and
measurement criteria. Journal of High Technology Management Research, 27(3), 216–233.

benefits. Program closure emphasizes the consoli-
dation of program benefits to transition to sustained
benefits and the execution of a controlled close-
down of the program.
2.2 Developing Conceptual Clarity
Definitionally, links between projects and programs
have been well-established. As we noted earlier,
programs are typically defined in terms of
a collective set of linked or related projects. At the
same time, program management theory suffers
from a simultaneous pull toward these unions and
a push against the notion of linking projects and
programs too closely. That is, while our understand-
ing of programs is predicated on the idea that they
represent “the coordination of projects and related
non-project activities” (Pellegrinelli, 2011, p. 233),
many within the field have advocated for a distinct
program management discipline that distinguishes
it from the perception that it is simply project man-
agement writ large (c.f. Thiry, 2002; Lycett, Rassau,
and Danson, 2004; Pellegrinelli, 2011). The PMI
and the Association of Project Management (APM)
have entered this controversy, through their accred-
itation and standards assessments. PMI now
offers its PMP certification for project managers,
as well as PgMP certification “for those who
manage multiple, complex projects to achieve stra-
tegic and organizational results,” and even a PfMP
certification for portfolio managers. Further, while
there is between-group variance in distinguishing
between projects and programs, it is also important
to point out that as our understanding of programs
has evolved, so too has the within-group variance
associated with alternative forms of programs.
For example, the Global Alliance for Project
Performance Standards (GAPPS, n.d.) has devel-
oped a typology of programs, including strategic,
operational, multiproject, and megaproject,
suggesting that within the broad context, several
key features of programs may vary considerably.
As a result, while definitional linkages continue to
point to the commonalties existing among pro-
jects, programs, and portfolios, both academic
and practitioner organizations have initiated
standards challenges that seek to create greater
conceptual differentiation among these roles
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Program Management 109
(Martinsuo, 2013; Young and Conboy, 2013;
Teller et al., 2012).
Pellegrinelli’s (2011) role in helping differentiate
and shape our understanding of the unique nature of
programs as distinct from projects and project man-
agement has been invaluable. He argues that while
program management initially emerged from
project management, it has since drawn insights,
techniques, and theories from other complementary
fields. Because they offer a more holistic and
broader context for understanding, programs are
better at addressing change conditions characterized
by organizational uncertainty, complexity, ambigu-
ity, and sheer scale. Particularly, when projects and
programs are treated as substitutes, we run the risk
of making implicit trade-offs between focus, effi-
ciency of delivery, and control (goals of projects)
and flexibility, emergent technologies, and benefits
realization (the focus of programs). That is, pro-
jects, in this context, are tacitly viewed as having
a more discrete “being” ontology (Chia, 1995), that
defines them in terms of a concrete or ex-ante set of
deliverables and methods for achieving goals.
On the other hand (and with a view toward estab-
lishing better definitional distinction), it is argued
that a “becoming” ontology provides the appropri-
ate lens to view programs, when they are viewed as
a means for embracing ambiguity within the change
process – either ambiguity of final deliverables or
ambiguity of means to achieve these ends.
The view of programs as a suitable vehicle for
wider organizational change helps create a distinct
conceptual categorization for programs and their
defined purposes and methodology within the
broader context of project management theory
(Gray, 1997). Although work will continue to high-
light the development of separate standards and
bodies of knowledge among projects, programs,
and portfolios, for our purposes, it is sufficient to
touch on this emerging movement as another piece
of evidence on how our understanding of programs
and program management will continue to be
predicated on recognizing that the broader concep-
tualization of programs is still evolving. Ultimately,
the controversy regarding the interplay and relation-
ships among projects, programs, and portfolios is
far from settled. Conceptual clarity regarding each
methodology is important, but it raises a larger point
 110 Peerasit Patanakul and Jeffrey K. Pinto
as to the benefits and drawbacks of moving
toward greater differentiation. It is certainly useful
to understand these concepts (projects, programs,
and portfolios) in terms of their own unique proper-
ties, but it is equally critical that we develop an
appreciation for both their joint and differential
properties, as this latter point emphasizes how we
can better coordinate top management actions.
3 Program Management
3.1 What Is Program Management?
Program management typically refers to the centra-
lized coordinated management of a program by
applying knowledge, skills, tools, and techniques
to achieve the program strategic objectives, require-
ments, and benefits (IPMA, 2013). By this defini-
tion, program management is strategic in nature.
Program management provides a linkage between
execution and strategy as it integrates the deliver-
ables and work flows of multiple interdependent
projects to develop and deliver an integrated pro-
duct, services, or capability (Milosevic et al., 2007).
Program management also provides a focal point
for ownership and accountability for business
results. Without program management, the owner-
ship and accountability of the product, services,
or capability may be shared by the functional
managers of the business as the product moves
through its development life cycle (Milosevic
et al., 2007). PMI suggests nine supporting pro-
cesses for program management including integra-
tion management, scope management, schedule
management, financial management, resource man-
agement, risk management, quality management,
procurement management, and communications
management (PMI, 2013).
Integration management focuses on the processes
and activities needed to initiate a program, develop
a program management plan and program infra-
structure, direct and manage program execution,
manage program resources, monitor and control
program performance, conduct program transition
and benefit sustainment, and close the program.
Scope management emphasizes the processes and
activities for scope planning and scope control
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that include defining program scope, goals, and
objectives; developing program requirements,
architecture, and Work Breakdown Structure;
managing program architecture and interfaces
among projects; and monitoring and controlling
program scope.
Schedule management involves processes and
activities for schedule planning and schedule
control, including determining the sequence of
projects to be executed, identifying program cri-
tical path, and establishing milestones to ensure
the proper progression of the program within the
predetermined constraints.
Financial management includes the process and
activities for cost estimation both at the program
and project levels, identifying the sources and
resources of program’s finance, integrating bud-
get of the individual projects, developing overall
program budget, and monitoring and controlling
cost both at the project and program levels.
Resource management involves processes and activ-
ities for resource planning, resource prioritization,
and resource interdependency management.
Risk management consists of the processes and
activities for identifying and assessing program
risks; developing risk response plans; and
monitoring and controlling program risks.
Quality management involves processes and
activities for quality planning, quality assurance,
and quality control to ensure the quality of pro-
gram products.
Procurement management describes the processes
and activities for planning, conducting, adminis-
tering, and closing program procurements.
Communications management includes the pro-
cesses and activities for ensuring the timely col-
lection, record, distribution, and disposition of
program information to stakeholders.
In addition to these processes, PMI suggests five
performance domains of program management
consisting of program strategy alignment, program
life cycle management, program governance,
program stakeholder engagement, and program
benefits management (PMI, 2013). Undeniably,
effective program management requires the under-
standing of program strategy alignment and stake-
holder engagement. It also requires a structured

governance framework that involves the manage-
ment of multiple projects to achieve the program
goals while monitoring and controlling integrated
cost, schedule, and effort. As projects within the
program are related through a common outcome or
a collective capability, effective program manage-
ment also includes the management of interactions
and interdependencies among these projects,
addressing escalated issues among projects, and
tracking the contribution of each project to the
consolidated program benefits (IPMA, 2013).
3.2 Interactions with Portfolio Management
and Management of Multiple Projects
As part of project portfolio management, the
interactions between program management and
project portfolio management can be found
throughout the program life cycle. During the
initiation phase, program management receives
inputs from the portfolio domain in terms of
strategic goals and benefits, funding allocations,
requirements, timelines, and constraints that the
program team translates into the program scope,
deliverables, budget, and schedule (PMI, 2013).
The program management team usually receives
the direction of control from the project portfolio
management committee. During the execution
phase, inputs from program management are
necessary for project portfolio management.
These inputs include status information, program
performance reports, budget and schedule
updates, and escalated risks and issues.
In addition to program management, another set-
ting of the management of multiple projects exists
in an organization. It is referred to as the manage-
ment of a group of multiple projects (MGMP) (see
Figure 8.1). A project manager who operates in this
setting is referred to as a multiple project manager.
Different from program management, MGMP is
a management condition that a project manager
leads multiple, simultaneous projects (Patanakul,
2013). These projects may not share the same
goals and may not be related but are managed by
a project manager to achieve better resource utiliza-
tion, and synergy, or to leverage technological and
resource interactions and interdependencies. Even
though this management setting is not referred to as
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Program Management 111
program management, some of the projects mana-
ged in this setting can be parts of a program.
3.3 Program Manager
Program management requires a capable business
leader, a program manager, who generally has two
primary roles (Milosevic et al., 2007). The first role
of the program manager is to manage the business
on their programs with the ultimate responsibility
for accomplishing the program objective, contribut-
ing to the business objectives or goals. The program
manager can be considered a primary business
strategist who continually focuses on the strategic
business objectives in order to drive the need for the
program for its output – products, services, and
capabilities (Thiry, 2004). This can be done through
the development and management of the program
business case throughout the program life cycle.
Part of the business case involves developing
a robust set of critical success factors and metrics
that are used to determine the viability and the
success of the program. The program manager is
also responsible for managing program finances,
cash flow, and cost. Once the program is approved
or awarded, funds are transferred to the charge of
the program manager. In the case that phase/gate
development processes are utilized, funds may be
released in association with the accomplishment of
key gate activities. The program manager has to
monitor the income and program expenditures
with an attempt to maintain positive program cash
flow. The program manager also has to monitor
business risks and must be aware that the failure of
any one project within a program can jeopardize
the success of the entire program. In addition, the
program manager must focus on the market and
continual monitoring of market conditions. The
program manager needs to understand who the
competitors are and what they have to offer
(Milosevic et al., 2007).
The second role of a program manager is to
lead a set of highly interdependent project teams
throughout all phases of the program life cycle
(Thiry, 2004). From a structural/hierarchical
perspective, the program manager’s direct reports
include the project managers tasked with
accomplishing each of the incremental projects
 112 Peerasit Patanakul and Jeffrey K. Pinto
that collectively make up the program. Within
this role, the program manager must establish
the program vision indicating the end state that
the program is attempting to achieve as well
as the differential contribution of each of the
projects toward that higher goal. The program
vision should drive the creation of cohesive and
high-performing teams. The program manager
has to carefully select the program core team
members and empower them by giving away
a portion of his or her power to the project
managers. Critically, the program manager does
not manage the projects but coordinates efforts
between them. The program manager oversees
and provides direction and guidance to the
project managers. To promote the creation of
innovative solutions, the program manager must
create a climate that supports risk-taking.
The roles of the program manager mentioned
above fit into the program management life-cycle
phases suggested by Thiry (2004). The formation
phase requires sense-making, seeking of alterna-
tives, evaluation of options, and choice. Strategy
planning and selection of actions are needed in the
organization phase. The deployment phase involves
the execution of projects and support operational
activities, and control. Assessment of benefits,
review of purpose and capability, and making
adjustment if required are the roles of the program
manager in the appraisal phase. Reallocation of
people and funds, knowledge management, and
feedback are needed from the program manager in
the dissolution phase.
To be able to perform various roles, some of the
key attributes of successful program managers
include: possessing a sense of vision, trustworthi-
ness, credibility, and competence (Milosevic et al.,
2007). The program manager should be a visionary
who creates and communicates a clear, compelling,
and achievable vision to be able to influence the
program teams to follow the direction and work in
a collaborative manner. The program manager must
continuously demonstrate that they are trustworthy
and that they expect the same from all members
of the program team (Milosevic et al., 2007).
The program manager must be credible and have
a strong commitment to the success of the program.
In addition, the program manager must be
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competent in leading the program team to achieve
the program goals.
3.4 Program Management Office
Administratively, it is common that a Program
Management Office (PMO) be set up as an impor-
tant program resource. In large programs, the
PMO can function as a suborganization within
the larger program structure. The PMO serves as
a home base of the program manager with the
primary objective to promote consistent, repeatable
program management practices resulting in the
efficient use of resources (Milosevic et al., 2007).
In particular, the PMO provides support to the pro-
gram manager in terms of defining and enforcing
processes used in program management, managing
schedule and cost at the program level, defining
quality standards, providing centralized support
for managing changes and tracking risks and issues
(PMI, 2013).
The PMO can be considered as the focal point for
program management information and knowledge
management within an organization (Milosevic
et al., 2007). This central repository allows the
accessibility and opportunity for wide distribution
of information, including postprogram review
information and lessons learned. In some cases,
the PMO may be responsible for providing
consultation and mentoring for program manage-
ment issues and problems and establishing an
escalation procedure up to senior management for
decision-making and resolution of the issues that
are outside the responsibility and control of
a program manager (Milosevic et al., 2007).
Most importantly, effective PMOs must serve as
the conduit or linking mechanism among the variety
of projects being undertaken on behalf of the pro-
gram. For example, the PMO may contain a pool of
technical experts who can be loaned to individual
project teams that are facing technical problems.
PMOs are also the best place to locate compliance
officers, reporting metrics, and other control and
governance devices for the program at large.
For example, in the case of a large government-
sponsored program, an organization’s PMO staff
may include those responsible for collecting and
updating critical status information, such as

earned value, exception reports, or other required
documentation.
3.5 Program Governance
Program governance activities span the program
life cycle. The focus of program governance is on
overseeing the progress of the program and the
delivery of the coordinated program benefits.
The critical difference between many governance
methods at the project versus the program level is
that they recognize the higher-order challenges
program governance faces. Thus, rather than
employing important but relatively discrete project
governance techniques such as technical risk
management, a program-level governance system
may provide a strategic-level oversight process
that allows the program sponsor and key organiza-
tional executives full performance information
and the ability to reshape the emergent program.
A common governance approach is a phase-gate
review (PMI, 2013). Decision gates can be put at
the end of each phase of the program life cycle to
review the progress of the program, risks (including
effectiveness of responses to identified risks and
the recognition of new ones), resources (their avail-
ability and/or current burn rate), quality, and status
of deliverables. If the program was initiated as
part of a project portfolio, these reviews can be
carried out within the context of project portfolio
management.
These assessments can be tricky. For example,
cost/benefit analysis frequently changes during
a program as a result of changing market conditions,
political leadership changes, and other critical
environmental shifts. Constantly running new cost-
benefit analyses is problematic because it requires
continuous monitoring and adjustments, but to what
end? Does the assessment include some form of
trigger that will halt a program in midstream and,
if so, is it likely that top management, heavily
embedded in a program or fully committed to
its realization, will initiate a “kill” command?
The work of Flybjerg and Kahneman (on “delu-
sional optimism”) on the behavioral nature of pro-
ject development and execution would suggest this
is not likely (Flyvbjerg, 2011). This problem has
been exacerbated by social and political pressures to
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Program Management 113
justify, often ex post, the results of expensive
programs that have failed to realize their originally
intended benefits (typically the fulcrum on
which initial funding was first agreed). Political
economists like Albert Hirschman (who coined
the term “Hiding Hand”) sought to justify these
expenditures by arguing that ignorance is good in
planning; indeed, if stakeholders knew programs’
true costs, they would never sanction them in the
first place (Hirschman, 1967; Flyvbjerg, 2016).
The frequent result has been deliberate strategic
misrepresentation that makes effective governance
extremely difficult; that is, how does one govern
that which deceptive practices first authorized
(Jones and Euske, 1991)? Thus, the better that
governance can specify formal gates, formal
reviews, and objective criteria, the better able
governance can maintain control of a potentially
runaway program.
3.6 Benefits Management
Programs can deliver incremental benefits along the
program life cycle as well as overall benefits at the
end of the program. The attainment of the program
benefits requires the establishment of processes and
measures for tracking and assessing benefits
throughout the program life cycle. Program benefits
management starts with the assessment of the value
of the program’s benefits, identification of the inter-
dependencies of the benefits being delivered among
various projects within the program, and assign-
ment of responsibilities and accountability for the
actual realization of benefits from the program
(PMI, 2013). During program initiation, a program
management team should perform benefit realiza-
tion planning, consisting of the identification of
intended interdependencies among benefits, align-
ment of program benefits with strategic goals of
the organization, benefit delivery scheduling,
metrics and measurement for assessing benefits,
responsibility for delivery of the intermediate and
final benefits within the program, and the benefit
realization (PMI, 2013).
Although logical in its orientation, benefits
realization is often quite hard to accomplish in
practice. There are a number of reasons why
program benefits management continues to prove
 114 Peerasit Patanakul and Jeffrey K. Pinto
elusive. A recent informal poll of nearly one hun-
dred members of PMOs on the nature of benefits
management revealed some intriguing findings.
When asked why benefits management is so hard
to accomplish, the top five reasons given were
(Santiago, 2012):
(1) There is often no defined governance around
benefits. That is, project and program managers
are trained to view governance as a process for
project or program control – executing pro-
grams and delivering outputs – rather than
viewing their job as one of benefits realization
and delivery. When the initial orientation is
misdirected toward outputs, instead of benefits,
it is hardly surprising that the net result is the
continual mishandling of these benefits.
(2) Benefits are not standard or comparable.
Because programs differ in magnitude and pur-
pose so dramatically, it is often difficult to parse
out a unified or repeatedly methodology for
managing and delivering benefits. Different sta-
keholders have different expectations and pro-
gram goals vary widely. As a result, it is not
clear how to convey benefits from a program to
the customers.
(3) Accountability for benefits is misplaced. It is
not always clear who is responsible for deli-
vering what aspects of the projects that, col-
lectively, build the program. When program
heads or project managers are unclear as to
who has responsibility for benefits realization
and management, the program runs the risk of
everyone focusing exclusively on their own
concerns without regard to the need for col-
lective responsibility. As a simple rule of
thumb, Santiago (2012) noted:
a. Project managers are accountable for deli-
vering capabilities.
b. Program managers are accountable for
delivering business outcomes.
c. Top executives are accountable for the
link between business outcomes and
financial results.
(4) Unrealistic business cases. It is critical that
the program promise only what it is capable
of delivering and, then, deliver on its pro-
mises. The lack of realism in business case
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development (the promises we make to our
customers) may have a short-term salutary
effect on the program’s approval and fund-
ing, but it creates a myriad of downstream
problems, when the newly completed pro-
gram is greeted with indifference or outright
disdain by customers who have no interest in
using it.
(5) Benefits are not verifiable. When
a program’s benefits are phrased in broad or
unclear language (e.g., “the program’s result
will be an improvement on the current
method”), they become instantly unverifi-
able. Thus, attempts at measuring these
benefits are equally impossible and each
party to the program is left with the need to
interpret the benefits for themselves, in the
narrowest sense.
The above five issues related to program bene-
fits management offer some insight into the think-
ing of those currently working in PMOs. Though
perhaps not definitive themselves, they do
point toward the need for both researchers and
practitioners to develop a better understanding of
program benefits management. Unless we frame
“benefits” in a manner that is as definable,
measureble, and consistent as possible, we will
not be able to construct a useful benefits manage-
ment system.
4 Managing Programs in Practices
Programs require significant efforts of planning,
coordination, and collaboration through estab-
lished processes, strong team efforts, and the
involvement of multiple stakeholders. Even with
significant resource commitment and undertaking,
many programs, both in public and private sectors,
fail. Managing programs in the public sector is
reviewed in this section. Problems and issues in
managing public and government programs have
long been indicated in the literature; including, the
complexity of the programs, political environ-
ment, multiple stakeholders, benefit management,
product life cycle, and processes (Patanakul et al.,
2016).

4.1 Managing Complexity
We have noted that a program is typically
complex. It involves a large system scope consist-
ing of various elements and a range of ambiguous
and uncertain external and internal factors
(Marrewijk et al., 2008; Davies and Mackenzie,
2014). The high level of program complexity
leads to many challenges faced by the program
team, resulting in stakeholder displeasure and
additional program cost. To address program
complexity, front-end planning coupled with
proper managerial processes is required. One effi-
cient way to plan and manage a program is by
modularizing it into smaller projects based on,
for example, characteristics of technology applied
to the deliverables. Utilizing the program man-
agement office to coordinate the effort can also
help. Planning and coordination of suppliers and
subcontractors are equally important and critical
to the overall program performance (Patanakul
et al., 2016).
4.2 Navigating through Political
Landscapes
In the public sector, programs typically operate in
a political environment, which has significant
impact on program performance and places many
challenges on the program team. Government pro-
grams are affected by political risks (Flyvbjerg,
2006). Many programs are thus ruled by political
agendas reflecting the relatively short-term views
of legislators and ministers. In addition, govern-
ment programs are susceptible to the changes in
government policies and law, budget allocation,
and grants and permits (Bueno, 2010). Large pub-
lic programs are often planned and built in com-
plicated and changing political environments. It is
important to ensure that proposed ideas are in line
with current legislation and the strategy of the
government agency before moving the program
forward. In addition, in government programs
involving several political stakeholders with var-
ious agendas, providing more authority to the pro-
gram manager may increase program performance
(Patanakul et al., 2016).
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Program Management 115
4.3 Program Management is Stakeholder
Management
Programs typically consist of several stakeholders
with various objectives and expectations, who may
affect the progress of the project in political, social,
or financial ways. Considering the political envir-
onment and related issues, planning for and man-
agement of stakeholders becomes a crucial factor in
government programs and requires careful risk and
stakeholder management consideration during the
planning and execution processes (Zwikael et al.,
2014). Program stakeholders must be recognized.
The potential purpose and impact of each involved
party must be distinguished as they are vital to the
program performance. Stakeholder engagement is
a useful “process of identifying key stakeholders,
analyzing their influence on the project, and mana-
ging their influence and impact–including winning
their support where possible” (DPAC, 2011).
Although it may be difficult to identify agendas
of multiple stakeholders, it can be advantageous
to understand who is for or against the performance
of the project. Alignment, collaboration, and
communication among the stakeholders are issues
to be addressed in every program (OGC, 2003).
Program progress is dictated by not only alignment
under political agendas but also formalized
communication and collaboration channels. When
government projects involve multiple agencies,
forming cross-agency cooperation and establishing
interagency agreements are of utmost importance
(Patanakul et al., 2016).
4.4 Managing Benefits
We noted previously that benefit management
is vital in program management. Despite its
importance, benefit management can be challen-
ging, especially when managing programs in
the public sector. It is typical that government
programs often focus on nonfinancial benefits as
they are undertaken in the service of the public
(for the public good), rather than being driven
by revenue or profit. Thus, building a standard
business case for some programs may be proble-
matic (Pellegrinelli et al., 2007). However, the
 116 Peerasit Patanakul and Jeffrey K. Pinto
performance of government programs is typically
evaluated based on the traditional measurement
of time, cost, and scope, rather than realization
of target benefits (Pellegrinelli et al., 2007).
Without assessing the benefits, the program may
not deliver products, services or capabilities, and
intended outcomes. Performance criteria such as
organizational and program benefits should be
used to supplement the conventional model
(Zwikael & Smyrk, 2011). Target benefits should
be defined in a unique, specific and measurable
way to allow managers determine whether they
have been realized. Methodology for evaluating
target benefits should be established and agreed
upon (OGC, 2003; Patanakul et al., 2016).
4.5 The Role of Technology and Design
for Solutions
A long product/deliverable service life can place
another challenge in managing programs. The
deliverable/outcome of government programs are
expected to be operational for many years after
being launched. With the expectation that the pro-
duct will have a long life, product design and plan-
ning can become very challenging. To enhance the
service life, the product should be designed with the
focus on quality and product utilization time in
mind. In addition to product quality, the anticipation
of future needs in order to extend the time of product
utilization can lead to a high level of technological
uncertainty involved in product design that the
project team must pay attention to. With a high
level of technological uncertainty, decisions to
adopt certain technologies become extremely chal-
lenging. If there are conventional technologies
ready for adoption, the project team has to justify
whether or not those technologies will become
obsolete in the near future and whether or not the
existing technologies are flexible enough to incor-
porate future changes. In many cases, advanced
technologies required by the program do not exist
at the beginning of the program. The team has
to develop technologies along with the product;
however, the technologies may not mature enough
to be adopted. To enhance program performance, if
possible, the project team could reduce the occa-
sions of using unapproved (e.g., too advanced)
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technologies. To alleviate the issue of technology
obsolescence, the project team may consider
flexible design to accommodate the integration of
future advanced technologies. Consultation with
technology experts about the technological trend
and long-term technology changes is beneficial
(Patanakul et al., 2016).
4.6 Processes and Governance
The mandatory use of a formal process makes the
management of government programs unique.
This includes the formality and intensity of
processes for budgeting, project planning and
execution, project monitoring and control, project
governance, and internal audits and reviews.
Government projects and programs must follow
government standard processes for specific
activities related to project management, e.g.,
acquisition activities, program review, and audit-
ing. While a certain set of standard formal pro-
cesses should be practiced, ineffective use of
processes has been found (Pellegrinelli et al.,
2007). To successfully manage government
programs, the understanding of the process is
necessary. In general, government agencies must
pay attention to the development of their project
and program management capabilities. This
includes the development of project and program
management processes. Government-specific
processes must be developed, and each govern-
ment agency should be able to adapt its processes
contingently to its projects and programs
(Patanakul et al., 2016).
5 Conclusion
Programs and program management are
a complex challenge but an important role for the
project-based organization. The ontology of the
goals of a program relative to the more sharply
defined goals of projects, one of “becoming” ver-
sus “being,” in Pellegrinelli’s (2011) words, place
a stronger focus on the simultaneous linkages
and divergences between project and program
management. The observation that programs are
simply a collection of related projects may be

denotatively correct but it poses far larger ques-
tions in the practical implications of these words.
Programs thrive in ambiguity and uncertainty;
they are most at home in circumstances where
needs exist but methods are still in flux.
Programs give managers and organizations the
broadest potential remit to realize benefits, find
creative solutions, and operate as an emerging
(and far more interesting) phenomenon and
method for organizing work, resources, and col-
lective action. As we noted at the outset, pro-
grams, in both public and private settings, truly
offer the public the principle means by which we
change our world (Pinto, 2007).
6 Summary
This chapter discusses program management
in relation to project management and project
portfolio management. The clear understanding
of such relationships should lead to an opportu-
nity to integrate project, program, and portfolio
management standards and certification. The
chapter also summarizes some major elements of
program management such as program manager,
program management office, program govern-
ance, and benefit management. Further, the
chapter discusses program management in prac-
tice by highlighting issues and recommendations
from research on government programs. They
are managing complexity, navigating through
political landscapes; program management is
stakeholder management, managing benefits, the
role of technology and design for solutions, and
process and governance.
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 CHAPTER
9
Organizing for the Management
of Projects
The Project Management Office
in the Dynamics of Organizational Design
MONIQUE AUBRY and MÉLANIE LAVOIE-TREMBLAY
This chapter looks at a specific activity undertaken
within organizational project management: orga-
nizational design in the context of the Project
Management Office (PMO). At the moment, this
notion of organizational design has not yet entered
the field of project management. However, this is
exactly what decision-makers in organizations do
when they put in place or renew a PMO or several
PMOs. Clearly, they deal with challenges of
delivering multiple competing projects in complex
and pluralistic contexts. We contribute to the
definition of organizational project management
by identifying what people really do when they
are organizing for projects.
1 Introduction
Following the latest reform of health and social
services, almost all healthcare entities have been
merged. I am the deputy CEO of one of these
merged institutions. One of my main roles is to
organize the internal functioning of our organiza-
tion. In this approach, I have set up a coordination
structure at the top level of the organization. I have
dissociated on one hand the coordination of current
operations (i.e., clinical activities) in an integrated
services with the reform context, and on the other
hand, the performance and improvement, of which
one component is the monitoring and control of
“all” projects (strategic, lean, accreditation, and
so forth).
(Personal email received recently from
a decision-maker, translated and adapted by one
of the authors)
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The excerpt presented above translates in a vivid
way the challenges facing decision-makers in
how to organize activities in a changing context,
while being asked to reach high level-performance
objectives. Not only does this represent a challenge
for keeping operations ongoing, but facing the man-
agement of multiple projects makes this situation
even more problematic. At the heart of these chal-
lenges is organizational design using strategic
thinking. The PMO is only one part of this global
thinking.
Organizational design is defined as “the
structures of accountabilities and responsibilities
used to develop and implement strategies, and the
human resource practices and information and
business processes that activate those structures”
(Greenwood & Miller, 2010, p. 78).
What we are interested in is the particular proble-
matic that relates to the management of multiple
projects in large organizations. Contrary to the
situation prevailing in management and organiza-
tion theory, scholars in project management have
been interested in this problematic through
a diversity of perspectives, while not associating
their work with the organizational design stream.
The following research relates directly to the orga-
nizational design, including, among others: project-
based organization (Bakker, 2010), project portfolio
(Kopmann, Kock, Killen, & Gemunden, 2015;
Unger, Kock, Gemünden, & Jonas, 2012), mega-
projects (Miller & Hobbs, 2005), governance
(Müller & Lecoeuvre, 2015), project management
offices (Artto, Kulvik, Poskela, & Turkulainen,
2011; Aubry, Hobbs, & Thuillier, 2007).
119
 120 Monique Aubry and Mélanie Lavoie-Tremblay
However, very little has been proposed to build
a coherent, integrative theory of the different facets
of organizational design from the field of project
management, with the exception of scholars
within the organizational project management area
(Aubry, Sicotte, Drouin, Vidot-Delerue, & Besner,
2012). Moreover, very little has been done to bring
answers to managers facing the challenges of orga-
nizing projects as a whole.
Changing the focus of research from individual
components (i.e., portfolio, governance, PMO)
to organizational design has an important
implication for project management theory. What
is suggested is to turn to the organizational design
to draw an initial theoretical framework and
then, from empirical evidence, confirm the
relevance of such a framework and contributions
to project management professionals. When
we refer to organizational design, we refer to
the seminal work of Galbraith (1977, 1995),
Mintzberg (1979), Miller and Friesen (1984),
and, more recently, of Pettigrew (Pettigrew &
Fenton, 2000; Pettigrew et al., 2003). While
these foundations are still relevant for organiza-
tional design, a fresh look at this field has to be
undertaken. Project management scholars are
in the best position to do so as mentioned by
Greenwood and Miller (2010): “. . . we restate
the importance of organization design highlight-
ing the relatively recent emergence of highly
complex organizational forms and the intimidat-
ing challenges confronting the would-be
researcher” (p. 78).
We will examine a research program that took
place in three university hospitals where major
investments have been authorized for the redeploy-
ment of their services. The entry point in this
research program – PMOs dedicated to organiza-
tional transformation (the human side) – allows for
observing how decisions on organizational design
occur in this context and how they are implemented.
Results presented here are interesting: each hospital
implements a unique organizational design (includ-
ing a PMO) to deliver a similar project. Moreover,
outcomes from the three projects are comparable.
These results emphasize the interest in a better
understanding of the organizational design to
account for organizational project management.
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The chapter is organized as follows.
A literature review covers organizational design
in the management and organization literature
followed by the literature in the project manage-
ment field. A research question is then presented
followed by a theoretical framework elaborated
from a combination of three perspectives.
The methodology presents the mixed-methods
approach to provide a rich account of the three
case studies. Findings from intracase and inter-
case analyses are then presented. These findings
are then discussed and concluding remarks
provided.
2 What Do We Know About
Organizational Design?
Origins of modern organizations can be situated
at the end of the nineteenth century along with
profound structural changes in society and orga-
nizations – mainly from family to public owner-
ship (Chandler, 1962). Since then, organizations
have evolved, and scholars have developed the-
ories to account for their structure and their social
interfaces. The objective of this section is to
present a synthetic view of the state of the knowl-
edge on organizational design, first, from the
theory of organization perspective and, second,
more specifically, from the project management
perspective.
2.1 Organizational Design in Theory
of Organization
In the theory of organization, scholars have used
almost synonymously a diversity of terms to refer
to organizational design such as structure (i.e.,
Chandler, 1962; Galbraith, 1995) or architecture
(i.e., Nadler & Tushman, 2003). More recently,
under the influence of the research stream
concerned with the constant transformation of
organizations, the action verb has been preferred
to the noun, giving rise to a process view centered
on organizing and structuring (Pettigrew et al.,
2003; Weick, 2009).
Within this literature, organization design can be
classified into four groups (see Fenton and
 Organizing for the Management of Projects 121

Pettigrew, 2000, for a detailed review from 1950 theory adopted a very different approach to
to 2000). contingency theory within an industrial
economic perspective, where an organization
1. Universal form, including bureaucracy and
is seen as an internal capital market
multidimensional designs. Bureaucracy is
(Williamson, 1975).
associated with Weber’s (1947) early writ-
3. Network analysis approach. Not surprisingly,
ings, which saw in bureaucracy the central
these scholars have emphasized the relations
component of large-scale administration.
between individuals rather than the formal
In the same group of universal organizational
hierarchy between organizational entities
forms is Chandler’s (1962) multidivisional
(Burt, 1978). The concept of organizational
subset. An important contribution from scho-
relational and structural embeddedness was
lars in this group is that they have situated the
developed within this network approach
firm’s structure in a business strategy logic.
(Granovetter, 1992).
The main criticisms addressed to Chandler
4. New forms of organizing. The last group refers
relate to the subordination of structure to
to more recent and promising developments on
strategy not recognizing the per se value of
organizational design in an economic context
structure, which is similar to the “one best
that has changed dramatically since the end of
way” in bureaucracy.
the twentieth century. We have identified four
2. Contingency. A second group is the contin-
emerging research streams to support theoriza-
gency theorists, which is important in terms of
tion of what we now observed in complex
the numbers of scholars presented here in four
organizations. First, is the strategizing/structur-
different streams: early developments, matrix
ing dynamic approach developed by Pettigrew
form, configurational approach, and industrial
and colleagues (Pettigrew, Whittington, Melin,
economics. The early development is repre-
Sanchez-Runde, Van den Bosch, Ruigrok, &
sented by scholars who moved away from the
Numaami, 2003; Pettigrew & Fenton, 2000).
one best way of organizing. They recognized
In this perspective, organizational design goes
the diversity of organizational forms, and their
hand in hand with innovation. The second
goal was to explain this diversity with dimen-
contribution is the recent development of orga-
sions and contextual factors. Some scholars
nizational sociological theories to understand
developed ideal types (Burns & Stalker,
complex organizations such as actor-network
1961), while others rejected the idea of ideal
theory (Callon, 1986; Latour, 2005). Third are
types to work on the multidimensional analysis
knowledge theories as a potential foundation
of structural variables (Pugh et al., 1969).
for the organization design and very comple-
An important contribution of the contingency
mentary to networks structures, where the issue
school is the work of Lawrence and Lorsch
is to make islands of knowledge within
(1967) on the design principle of differentiation
networks connected in archipelagos (Hedlund,
and integration, developed further by Scott
1994). Finally, comes the work on postbureau-
(1973). Still in the contingency group, we find
cracy, where the power system is clearly taken
the work done on the matrix form of organiza-
into account in organization design (Clegg,
tion, mainly by Galbraith (1973), providing
2012).
some understanding of the emergence of
more complex structural arrangements of What can be first observed is the evolution of
organizational forms in large organizations. theoretical approaches from rigid and universal
The configuration approach also looked at toward dynamic and pluralistic forms of organizing.
some ideal types of forms but emphasized the The second element of analysis is that almost all of
internal coherence among all elements of both these approaches are still in use to understand cur-
strategy and structure (Miller & Friesen, 1984; rent organizational phenomena. Contingency
Mintzberg, 1979). Finally, the transaction cost theory in particular within its different aspects is

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 122 Monique Aubry and Mélanie Lavoie-Tremblay
mobilized to take into account the contextual
dimension of organizational phenomenon. Finally,
the last group refers to the most recent development
of organizational sociological theories to under-
stand complex organizations. Actor-network the-
ory, for example, has good potential to explain the
construction of internal/external networks forming
a structural organizational design around controver-
sies (Callon, 1986; Latour, 2005).
2.2 Organizing for Projects
In this section, we address the literature dealing with
organizing for multiple projects, excluding the
organization of a single project (i.e., Bakker, 2010;
Lundin & Söderholm, 1995). As a starting point, the
seminal work of Midler (1995) on projectification
offers the general idea that projects have a major
impact on the organization. This research has
positioned project management as a research field
concerned with specific organizational proble-
matics not really covered in the organization studies
at that time or not within a project perspective
(Aubry & Lenfle, 2012). The literature on innova-
tion has nurtured the emergence of project manage-
ment, in particular in organizational design (Burns
& Stalker, 1961). Structure and structuring have
been of interest for scholars over the past decades.
However, we face a situation of confusion with the
use of multiple terms to refer to organizational
design: project-based organization (-organizing)
(Cattani, Ferriani, Frederiksen, & Täube, 2011),
project-oriented organization (Huemann, 2010),
project organizing (Winch, 2014), multiproject
firms (Geraldi, 2008), project management struc-
tures (Larson, 2004), project-orientation (Lampel
& Jha, 2004), and PMO (Hobbs & Aubry, 2010).
Moreover, the literature on governance also refers
often to the question of structure. The question of
fragmentation on this particular topic of organiza-
tional design is a real challenge (Söderlund, 2011)
and the concept of organizational design may be
a good candidate for integration.
Most of the scholars of organizational design in
project management can be related to one of the
contingency approaches. Scholars have focused on
the matrix-type organization with the objective of
providing the best coordination mechanisms for
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projects (Hobbs & Ménard, 1993; Larson, 2004).
Research has mainly focused on the diversity of
dimensions and not much on ideal types (Hobday,
2000). A particular interest in the matrix-type
organization is the relation between projects as
temporary organizations and the parent organiza-
tion (Lampel & Jha, 2004). Context in structuring
is an important area of focus for scholars. Engwall
(2003) is emblematic of the stance “No project is an
island,” where he posits that different contexts call
for different structures. In this vein, research on
PMOs has mainly been done within the contingency
approach, with a stream of research looking for
ideal types (Hobbs & Aubry, 2008). Other scholars
have adopted the economic perspective of transac-
tion cost theory (Turner & Keegan, 1998).
Expanding from the steward and broker role,
they have emphasized and differentiated the role
of the sponsor and project manager. Also within
the economic perspective of transaction costs, the
recent work of Winch (2014) directly addresses the
question of organizational design by proposing
a conceptual model articulated in three domains
of project organizing, moving away from the search
for ideal typology. He situates the interfaces
between the temporary and the permanent in
a coherent framework. This contribution is a good
example of how the field of project management can
enrich organization theory by addressing organiza-
tional problems facing most large organizations
today.
Other recent developments in organizational
design in project management can be found
in the following themes: internal networks
(Müller, Glückler, Aubry, & Shao, 2013), knowl-
edge (Bresnen, Goussevskaia, & Swan, 2004;
DeFillippi, 2001), and postbureaucratic (including
governance and megaprojects) (Clegg,
Courpasson, & Phillips, 2006; Flyvbjerg, 2001;
Miller & Lessard, 2000). Finally, what can
be observed from the latest research is the
acknowledgment of pluralistic organizations
where tensions and paradoxes exist within
complex organizational structures (Aubry,
Richer, & Lavoie-Tremblay, 2014; DeFillippi &
Arthur, 1998; Smith & Lewis, 2011).
What is of great interest in recent years is the
development of research on organizational design in

new forms of organizing in the field of project
management, while also acknowledging some
disinterest on the part of scholars in management
and organization theory (Fenton & Pettigrew, 2000;
Greenwood & Miller, 2010; Pettigrew & Fenton,
2000).
Our literature review on organizational design,
from both the theory of organization and the
project management field, revealed the persis-
tence of contingency theory on the one hand and
the move toward social theories to explain
new forms of organizations on the other. It also
emphasized the active role of the decision-maker
to create and experiment with a design embedded
in a more global and dynamic context. It is now
accepted that the resulting structure will be
temporary.
2.3 Research Question
When we admit that there is no ideal model to
cut and paste in pluralistic organizations and
that the organization keeps changing, the ques-
tion of “how to organize?” emerges for both
scholars and decision-makers. Here, we focus
on understanding the process of organizing
(performing the design) and the resulting
organizational design. Therefore, the research
question is: “How to organize for the manage-
ment of multiple projects?”
3 Theoretical Background: Toward
a Process Theory Approach
In this study, we offer a theoretical approach parti-
cularly well adapted to the case of organizational
design for the management of projects; namely,
process theory (Hernes, 2014). In process thinking,
“process is constitutive of the world” (Hernes, 2014,
p. 44, emphasis in original text). Adopting process
thinking requires turning to a different philosophy
(Nayak & Chia, 2011) and set of assumptions than
in management and organization theory (Hernes,
2014). In this study, we did not adopt the full
perspective of process thinking; rather, it inspires
our approach. We focus here on three perspectives
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Organizing for the Management of Projects 123
Contingencies
(Donaldson, 2001;
Engwall, 2003)
Social
Historiticities Interactions
(Hernes, 2014; (Clegg & Pitsis,
Hughes, 1998; 2012; Flyvbjerg,
Zeitlin, 1998) 2001)
Figure 9.1. Theoretical background within
a process approach.
within a process approach: contingencies, historici-
ties, and social interactions (see Figure 9.1).
Contingencies. We agree with Greenwood and
Miller (2010) on the relevance of contingency the-
ory for capturing the context. Contingency theory
explains how certain organizational forms or
dimensions are more likely to be associated with
superior performance than others, and it takes
strongly into account the context of the organization
(Donaldson, 2001; Engwall, 2003). In this study,
contingencies are not limited to variables and
defined framework (Hernes, 2014), but they also
take into account the context relevant to the organi-
zational design. This context should cover all facets
of organizational life such as power, conflicts, and
tensions (Smith & Lewis, 2011) that lead to
dynamic transformation of organizations. These
social interactions of organizational life are outside
mainstream contingency theory.
Historicities. In process thinking, there is an
ongoing view of temporality. Is goes over
a longitudinal perspective of “viewing things like
a linear duration of time and plotting the relation-
ships between events and actors over that duration
(Hernes, 2014, p. 44). Historicities entangle the
actual history and the possible future of organiza-
tions. The historicities approach takes as a premise
that changes constantly happen in impermanent
 124 Monique Aubry and Mélanie Lavoie-Tremblay
organizations (Weick, 2009). A particular phenom-
enon is best explained by taking into account the
history of the global context (Zeitlin, 2008).
In this regard, the history of iconic projects is
very relevant to understanding the evolution and
the context of decision-making (i.e., Hughes,
1998; Lenfle, 2011). Historicities put the notions
of time and temporality at the core of organiza-
tional design, which is so important in the context
of the project defined as a temporary organization
(Bakker, 2010).
Social interactions. There is a need to include
social aspects in the study of organizational design
as the power system is embedded in structures
(Clegg et al., 2006; Flyvbjerg, 2001). In this
vein, we turn toward a sociology of organizations
(Floricel, Bonneau, Aubry, & Sergi, 2014). Several
theoretical social approaches have the potential to
help us understand organizational design, such as
actor-network theory or postbureaucracy (Clegg &
Pitsis, 2012). However, we have chosen to adopt
sense-making (Weick, 1995) as the basis of the
social view of organizational design. The sense-
making approach puts emphasis on how people
go through a collective organizing process of
enactment, selection, and retention in a context of
ecological change (Weick, Sutcliffe, & Obstfeld,
2005). Interestingly, this theoretical approach fits
well with the thinking of new forms of organizing
where networks, knowledge, and the power system
are taken into consideration (Fenton & Pettigrew,
2000).
Hernes (2014) suggested a process perspective
on organizational structure: “[structure] belongs to
process, much as process belongs to structure”
(p. 67). The main point is that structure is a one-
off representation of social interactions. He defined
organizing as the articulation of organizational
meaning structures, where, “The meaning structure
is the closest we come to the noun-like character of
organizations, as their elements may include con-
cepts, physical objects, or human or social actors”
(Hernes, 2014, p. 115).
These three perspectives form the basis of our
process theory approach to organizational design.
The three facets retain the plurality of perspectives
to capture the complexity found in such organiza-
tional phenomena.
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4 Methodology
The overall research design is based on three in-
depth case studies in the health care sector,
all university hospitals where major transforma-
tion projects were going on at the time of the
research. They have all implemented a PMO as
a coordinating entity for the overall transformation
project. It is an opportunistic choice of cases
(Patton, 2002) but has a high level of relevance
regarding the organizational issue of how to
organize for projects in pluralistic contexts
(Denis et al., 2011). Multiple case studies offer
the possibility of comparison (Yin, 2013) between
the different contexts which is at the core of this
research. The cases are anonymized for reasons of
privacy and confidentiality.
Data were collected from different sources and
was mainly qualitative, with a total of sixty-four
interviews with a variety of respondents.
Questionnaires were completed by 54 of the respon-
dents. Data analysis was performed progressively.
First, qualitative and quantitative data were ana-
lyzed individually. Then intracase analyses were
undertaken for each of the three university hospi-
tals, for both qualitative and quantitative data
(Miles & Huberman, 1994). Common formats
adopted in individual case analyses facilitated inter-
case analysis. Several iterations were necessary to
make sense of the richness (and volume) of data
from different sources.
5 Description of the cases
The three case studies – A, B, and C – presented
here all had a long history before arriving at this
point of seeing the project finally realized.
Decisions on investments in one or the other of
these three hospitals have kept changing in relation
to events in the political environment and the
political party in government, as is often the case
in public project management (Flyvbjerg, 2001).
Table 9.1. presents an overall description of the
three cases at the time of the interviews. As can
be observed, the size of the organization as well as
the budget for the project is larger in A and B than
in C. It is worth mentioning that each case was at
 Organizing for the Management of Projects 125

Table 9.1 Description of the Cases

Actual Size of the Organization

Number of Age of Situation of the

Employees and Number Number Estimated PMO Steering PMO Transformation
Physicians of Sites of Beds Budget (CAD) PMO Staff Committee (years) Project

Case A 10,000 6 1,000 2,355 B 26 CEO and all 7 Last phase

department directors
Case B 12,000 3 , 2,439 B 19 Associate CEO and 2 Early phase
all department
managers
Case C 6,000 2 430 995 M 14 Some department 6 Middle phase
directors

GENERAL
MANAGER

PROJECT MANAGEMENT
STEERING
MANAGEMENT OF
COMMITTEE
OFFICE OPERATIONS

PMO members (n = 26) Steering members

Director (1) General Manager and all Participants to projects
Associate director (1) department directors
Administrative assistants (2)
Clinical experts (3)
Process experts (3)
Project managers (10)
Knowledge brokers (2)
Performance and evaluation expert (1)
Communication expert (1)
Change management expert (1)
Senior advisor (1)

Figure 9.2. Case A: Organizational design.

a different phase in the realization of this major
project, and this has to be considered in relation to
the age of the PMO.
Each university hospitals had put in place a PMO
and a steering committee at a very early stage of its
project (See Figures 9.2 to 9.4 at the time of
interview).
In all three cases, changes took place in the size
and functions of the PMO and the steering commit-
tee. These changes must be considered in relation to
events in the political sphere (e.g., elections), con-
struction evolution (e.g., signing of contracts), and
hospital management (e.g., change in the manage-
ment team).
We also wanted to take into account the project
portfolio and the degree of innovation in the three case
studies (See Table 9.2.). The number of projects in
case B is higher than the other two as they had split
their projects into smaller parts. The innovative nature
of projects is a dimension often used in project

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 126 Monique Aubry and Mélanie Lavoie-Tremblay

GENERAL
MANAGER

ASSOCIATE
GENERAL
MANAGER

PROJECT MANAGEMENT
STEERING
MANAGEMENT OF
COMMITTEE
OFFICE OPERATIONS

PMO members (n = 19) Steering members

Director (1) Associate General Participants to projects
Associate director (2) Manager and all
Administrative assistant (1) department directors
Process expert (3)
Project/change managers (6)
Human resource expert (1)
Communication and training advisor (1)
Training expert (1)
Research expert (3)

Figure 9.3. Case B: Organizational design.

GENERAL
MANAGER

ASSOCIATE
GENERAL
MANAGER

PROJECT MANAGEMENT
STEERING
MANAGEMENT OF
COMMITTEE
OFFICE OPERATIONS

PMO members (n = 14) Steering members

Director (1) Some department Participants to projects
Administrative advisor (1) directors
Administrative assistant (1)
Clinical expert (1)
Process expert (3)
Project managers (3)
Communication expert (1)
Change management expert (3)

Figure 9.4. Case C: Organizational design.

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Table 9.2 Projects Portfolio/Case
Type
Number of Product/
Projects Service Process Market Input Organizations
Case A 43 16 31 4 5
Case B 81 25 19 9 7
Case C 39 8 33 1 2
Note: the total is sometimes higher or lower that the number of projects because some projects fit into two types, or other
information may be unknown at the time of data collection
typology to make a decision about organizing
(Shenhar & Dvir, 1996). Innovation is described
here based on three parameters as part of a social
innovation system (Aubry et al., 2007): the type of
innovation built upon Schumpeter classification
(Drejer, 2004); the level of risk or uncertainty; and
the differentiation between incremental and radical
innovation. The nature of the global transformation
project is about the same in the three hospitals.
However, there are nuances between them as shown
in Table 9.2.
In cases A and B, the transformation project
includes the construction of new sites for multiple
clinical missions, while for case C, there is no moving
as such. The construction for C is more like an exten-
sion to the existing buildings. The nature of the trans-
formation project may have an impact on the types of
projects. For instance, in the case of C, most of the
projects are concerned with processes and do repre-
sent proportionately less risk and more incremental
innovation than in the two other cases.
6 Findings
In this section, are presented three main findings
from the analysis of these three cases: the diversity
of organizational designs; reflectivity in the
dynamic process of organizational design; and simi-
larity of outcomes.
6.1 Diversity of Organizational Design
Organizational chart. We analyze the organiza-
tional design along two dimensions. First, we
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Organizing for the Management of Projects 127
Innovation
Risk or Uncertainty Degree
None/low Medium High Incremental Radical
23 8 23 11 20 22
50 27 20 11 36 22
21 28 7 4 22 15
examine the organizational charts as a material
representation of the formal structure. Two main
points can be drawn from this analysis. First, delib-
erate mimetism occurs among all three university
hospitals in two ways (DiMaggio & Powell, 1983).
The three PMO directors met several times to help
each other and share their approaches, processes,
and tools. The research project also provides oppor-
tunities for sharing by means of transfer activities.
Second, following the above point, in all three
university hospitals, there was a strong conviction of
the need to take care of the people-transition process
as an organizational strategy. This situation can be
observed in the preparation period. The reflection
during the preparation period is the starting point of
the organizational design process. How to do this
project? In all three cases, three common mechanisms
have been put in place. First is the creation of an entity
responsible for supporting the whole organization to
succeed in their transformation; this supporting entity
is the one associated with the generic term PMO.
In all three cases, the PMO reports at a high level,
either to the general manager or the associate general
manager. Second, a coordination committee with
various levels of decision-making is formed with the
department directors. Third, all three cases have
adopted a matrix-type project structure, making the
project participants deal with both operations and
projects.
6.2 Sense-Making in the Dynamic Process
of Organization Design
In our perspective, organizational design is not
a static state of a structure as shown in the
 128 Monique Aubry and Mélanie Lavoie-Tremblay
Table 9.3 Trajectory of the PMO
Preparation
PMO/
Taming Period nomination Lag Period
Case A Visits to 2007 1 year
international sites
Case B Conflicting 2011 Very short 2011
period – site
Case C Unformal 2009 1 year
preparation
organizational chart. We argue that organizational
design is better understood as a process. Time and
temporality (ies) are major dimensions to take into
account in the study of the organizational design
(Langley, Smallman, Tsoukas, & Van De Ven,
2013). In this analysis, each case has been struc-
tured in comparable time periods to allow for inter-
case analysis (see Table 9.3.). In all three cases, we
found organizational design activities in preparation
for the launch of the project. We have considered
the PMO start-up as the formal signal of the starting
point of the project. Then, three periods have been
identified, namely, the initiation, cruising speed and
the last sprint. Only the first case was at the last
period at the time of data collection.
Overall, from Table 9.3, we can observe that
these three projects did not have the same story
even if they all happened in the same sector, are
all situated in the same geographic area, and were
all realized in about the same decade.
What is interesting in cases A and C is the time
taken in searching for a way to get organized for
a major project. For example, in the first case,
the managerial team went out to visit hospitals
in Europe and the United States. Hospitals are com-
plex organizations; they are pluralistic (Denis,
Langley, & Rouleau, 2007). As there is no model
to copy from one organization to another (Hobbs &
Aubry, 2010), there is no choice but to make sense
of the situation (Weick, 2009). It seems that it is
exactly what these organizations did.
As illustrated in Table 9.3., cases A and B went
through turbulences in their external or internal
environment. These turbulences translated into
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PMO 2nd Period: 3rd Period:
Start-up 1st Period: Initiation Cruising Speed Last Sprint
2008 Organizational Hard [Adverse] Making it
Turbulence control happen!
Organizational Organizational
Turbulence Turbulence
2012 Smooth transitioning Keep moving
changes to the organizational design, such as
changes in the mandate of the PMO or in the number
of employees in the PMO or new liaisons to be put
in place with other units (Aubry et al., 2014).
During these periods of turbulence, we found sense-
making activities to adapt to brutal changes in the
environment. Case C was the most stable of the
three cases regarding the organizational design.
In this case, there has been no organizational turbu-
lence as such, but sense-making activities took
place regularly among PMO members to adapt
their processes constantly to their changing envir-
onment. In this situation, it requires the whole team
to be attentive of weak signals in the environment
and to adapt.
6.3 Similarities in the Outcomes
The diversity of PMO designs is not surprising as
it is what is found in organizations. This situation
is exactly what has been found in the three case
studies presented here. But, what is interesting in
our findings is that the outcomes are quite similar
regarding the PMO performance and readiness for
change.
Performance. Globally, the data show only
a few differences in perception of the PMO perfor-
mance between the three cases. There are no sig-
nificant differences in the rational goal and output
from the projects, and there are four differences in
the HR dimension, internal processes, and open
system.
Readiness for change. There is no clear pattern
of significant differences among the three hospitals.

Overall, what the data provide is an account of
three cases, each facing the realization of a major
project of transformation within a professional
bureaucracy in a university hospital. The nature of
the projects is about the same with a difference of
scope regarding the budget. All three are situated in
the same geographical area and political system.
However, they have approached the organizational
design differently while they still reached about the
same outcomes regarding the contribution of their
PMO to the organizational performance and the
readiness for change.
7 Discussion
This chapter aims at exploring how organizations
handle challenges for the delivery of multiple pro-
jects. We had the opportunity to study similar trans-
formation projects in three university hospitals from
the same region and in about the same time frame.
This unique research situation offers the possibility
to observe three different dynamic mixtures of
social, political, and technological context, and
organization cultures resulting in three specific
organizational designs. Our aim is to understand
better how organizational design as a theoretical
concept explains, at least partially, decisions regard-
ing the management of multiple projects, and how
this can contribute to the development of theory in
the field of project management.
7.1 The Relevance of Organizational
Project Management
The three cases presented in this chapter illustrate
decisions that have to be made to put in place
coordination mechanisms and structure for the
management of multiple projects. All three have
adopted a unique organizational design; included
different resource profiles for the management of
projects; and adopted a variety of governance
mechanisms. It points to the fact that mimetism
has occurred in a limited way (DiMaggio &
Powell, 1983). Social connections existed at differ-
ent levels among the three organizations, with the
objective of sharing practices. However, each
case adopted a unique organizational design for
the management of projects. This highlights the
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Organizing for the Management of Projects 129
existence of activities at the organization level
regarding the management of projects, which is
differentiated from the management of the current
activities. These activities differ from project,
program, or portfolio management but have rele-
vance for the field of project management. An initial
definition has already been offered for organiza-
tional project management (Aubry et al., 2007).
Findings from this research convincingly describe
the work done through organizational design within
organizational project management.
7.2 A Pluralistic Theoretical Approach
on Organizational Design
There is some consensus among scholars in the
field of organization and management research
that new forms of highly complex organizations
forms are emerging (Clegg, 2012; Greenwood &
Miller, 2010; Pettigrew et al., 2003). The cases in
this study highlight this complexity. Not only do
the three hospitals face major challenges to
respond to their normal clinical operations related
to their health care mission (more demands and
fewer resources), but they also have to go through
a major organizational transformation. In all three
hospitals, the general manager had to answer the
question: how do we do that? In other words, how
do we orchestrate the collective efforts to bring the
transformation project to success (for the different
meanings of success) while at the same time keep
the quality of our day-to-day operations? This
situation relates to the concept of ambidexterity
as suggested by March (1991), where organiza-
tions need to engage in both innovation (explora-
tion) and operations (exploitation). In the context
of organizations dealing with projects, ambidex-
terity is a real challenge as illustrated in the three
cases.
In this chapter, we have described several facets
of the organizational design mainly around the
PMOs. We have shown that organizational design
represents pluralistic contexts, and as suggested by
Denis and colleagues (2007), it calls for pluralistic
theoretical frameworks. In this vein, we suggested
a process theory approach combining three
perspectives as described above: contingencies,
historicities, and social interactions.
 130 Monique Aubry and Mélanie Lavoie-Tremblay

7.3 Diversity of Organizational Designs: 2. Second, the initial theoretical framework

Similarity in Outcomes proposed in this chapter is a first attempt to
theorize organizational design as a crucial
One benefit from adopting a mixed-methods approach
component in the management of projects.
is that it is possible to provide different perspectives
The framework is built on three complemen-
on a unique organizational phenomenon (Cameron,
tary theoretical perspectives: contingencies,
Sankaran, & Scales, 2015). In this case, this approach
historicities, and social interactions.
provides a relationship between organizational design
3. It is also an attempt to integrate multiple
dimensions and outcomes. The findings show the
terms (forms, structure, project-based, project-
uniqueness of organizational design, confirming the
oriented, matrix-type, and so forth) under
specificities of organizations in their identity, histori-
a coherent theory of organizing for projects.
cities, and meanings (Hernes, 2014). The findings also
Fragmentation of the field was noted at the
show the absence of important differences between
project level (Bakker, 2010; Söderlund, 2011).
the three cases when considering the outcomes in
The same situation exists at the organization
terms of performance and readiness for change. This
level. Our theoretical framework offers an
is a significant finding, as rarely does research in
alternative to the economic view of transaction
project management cover organizational design as
cost theory (Winch, 2014) and other contin-
well as outcomes. emphasizes the diversity of paths
gency approaches.
that can be taken regarding organizational design. It
4. Regarding methodology, this chapter offers an
confirms that there is “no one way” to reach goals. The
example of the mixed-methods approach for the
diversity found in PMOs and their frequent changes
study of complex phenomena. More analyses
(Aubry, Hobbs, Müller, & Blomquist, 2011) is just
have yet to be done, but the combination of
a signal for organizations to work on their organiza-
qualitative and quantitative approaches was rele-
tional meaning structures (Hernes, 2014).
vant to provide insight into the problem at hand.
From a practical perspective, the main contribu-
8 Conclusion
tions for the project management profession concern
decision-makers who are engaged in organizational
The introductory excerpt denoted the need for deci-
design. The key message for them is slow organiza-
sion-makers to make sense of their organization in
tional design. What is meant here is that there is no
a pluralistic context. It illustrated how organizing
unique, ideal model to copy. So, there is a need to
for projects could not be realized around a single
make sense of the particular context of the organiza-
PMO but needs to consider the overall organization.
tion, its unique history, and identity, and to engage
This chapter brings some insights to answer the
in a collective effort to enact what is found outside
question: “How can a decision-maker organize for
and inside the organization. This takes time. And
the management of multiple projects?” From
finally, it requires the decision-makers to take an
a theoretical perspective, the findings can be synthe-
active role in the organizational design.
sized into four major points:
This research has limitations and offers opportu-
1. First, we have brought the notion of organiza- nities for future research. The main limitation of
tional design into the field of project manage- this research relates to the exploration of the organiza-
ment to provide a name to what is really done tional design within a process theory approach.
when working on structuring an organization Process theory is mainly associated with interpre-
to deliver projects. To do this, we have put tative methodology with a strong focus
efforts to bridge the research from the fields of on discourse. In this research, we have adopted
management and organization theory to the a rich mixed-methods approach based mainly on
project management field on organizational interviews and questionnaires. While it offers rich
design. description, it falls short in engaging in a real

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interpretative approach. A discursive approach
will certainly provide a complementary account
of the process of organizational design. Process
theory opens up several avenues for future theore-
tical and professional developments.
Acknowledgments
The research team is grateful to all informants of
this research who gave their precious time for the
advancement of knowledge. This research has
received a grant from the Canadian Institutes of
Health Research.
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 CHAPTER
10
Project Governance and Risk
Management
From First-Order Economizing
to Second-Order Complexity
STEPHANE TYWONIAK and CHRISTOPHE BREDILLET
Introduction
Until recently, the scholarship of project manage-
ment has been dominated by a traditional
approach reflective of foundational views about
how to conduct successful projects (Morris,
2011). This traditional approach assumes
a reductionist, positivist stance (Jackson, 2003;
O’Leary, 2012), which follows neoclassical eco-
nomics and the rationalist model of decision-
making (Goode, 1997; Simon, 1979), in which
analysis and action are cleanly separated in
a logical sequence (Koskela & Howell, 2002;
Ryle, 1984). Many of the contributions to the
emergent project governance literature (Ahola,
Ruuska, Artto, & Kujala, 2014) refer back to
rational economic theories that theorize the
firm as a nexus of contracts (Foss, 1993). Such
approaches conceive of governance as a choice of
form, which then drives incentives, decision
rights, and accountability. In this traditional
view, risk management is conceived of as a
rational, linear process of identification, analysis,
evaluation, and treatment (ISO, 2009) within a
defined organizational context.
However, the burden of calculative rationality
(Levinthal & March, 1993) bestowed by the
traditional approaches appears to be unbearable in
practice (Guo, Chang-Richards, Wilkinson, & Li,
2014; O’Leary, 2012; Ward & Chapman, 2008;
Winch & Maytorena, 2011). In this chapter, we
argue that a “Third Wave” approach (Morris,
Pinto, & Söderlund, 2011) to project governance
and risk management is required in order to address
134
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issues of process (rather than form) and uncertainty
(rather than risk).
We begin with a review of how project risk
management is shaped by governance. We then
examine contemporary theories of risk and uncer-
tainty and discuss their implications for governance.
The chapter concludes with implications for
practice.
Project Governance for Risk
Management: The “First-Order
Economizing” Logic
Two longstanding issues in the management of
organizations have been to ensure that managers
act in a manner satisfactory to those they are
accountable to (Berle & Means, 1991), within
efficiency constraints (Knight, 1921; Smith,
1776). A contemporary expression of these issues
is as follows: an organization is defined as
“a multiagent system with identifiable boundaries
and system-level goals toward which the
constituent agent’s efforts are expected to make
a contribution” (Puranam, Alexy, & Reitzig, 2014,
p. 166). Corporate governance is concerned with
providing agents with rules and safeguards to
guide how the organization is managed: “the
governance system defines the structures used
by the organization, allocates rights and responsi-
bilities within those structures and requires
assurance that management is operating effec-
tively and properly within the defined structures”
(Too & Weaver, 2014, p. 1385). Recent reviews of

the project governance literature (e.g., Ahola,
et al., 2014; Biesenthal & Wilden, 2014; Müller,
2011) note that two theories have been identified
as dominant influences: agency theory (AT) and
transaction cost economics (TCE).
AT and TCE Governance as First-Order
Economizing
AT informs how the governance system is shaped:
in order to avoid moral hazard and adverse selec-
tion (Akerlof, 1970), appropriate incentives and
rules and procedures must be implemented
(Jensen & Meckling, 1976). TCE addresses the
issues of shirking and opportunism. Williamson
(1975) argues that several forms are available to
govern economic transactions: markets, hierar-
chies, and hybrids. “Transactions, which differ in
their attributes, align with governance structures,
which differ in their cost and competence, so as
to effect a transaction cost economizing outcome”
(Williamson, 1996, p. 136). In other words,
“economic actors will choose that form of
governance . . . that reduces any potential
problems created by bounded rationality, on the
one hand, and by the threat of opportunism, on the
other, at the lowest cost” (Barney & Hesterly,
2006, p. 114). Williamson (1991) calls this choice
“first order economizing,” which he argues pro-
vides the foundation for economic performance.
Both AT and TCE involve a form of calculative
rationality (Foss, 1999) that enables economic
actors to maximize outcomes (Jensen &
Meckling, 1976) and identify the best choice
(Williamson, 1975).
Both AT and TCE view contracts as the
prime structuring mechanisms of governance:
“contractual relations are the essence of the firm,
not only with employees but with suppliers, custo-
mers, creditors, and so on” (Jensen & Meckling,
1976, p. 8). Economic actors are assumed to be
rational and foresighted so they can select the
appropriate form of governance ex ante even in
the presence of uncertainty (Barney & Hesterly,
2006). First-order economizing is an optimal choice
of form, based on an ex-ante rational calculation:
the selection of the appropriate contract determines
the governance. It follows that governance is
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Project Governance and Risk Management 135
top-down, and cascading or nested models assume
that enterprise-level choices determine or constrain
determinations at lower levels: portfolios,
programs, projects (e.g., PMI, 2013, 2016; Too &
Weaver, 2014). Therefore, the governance of
projects is dependent on overarching corporate
governance choices, rules, and processes.
First-Order Economizing, Governance
and Risk Management
Risk management is conceived as integral to the
corporate governance system (Arena, Arnaboldi,
& Azzone, 2010; Bhimani, 2009). The recurrence
of large-scale corporate failures has justified the
institutionalization of risk management (Brown,
et al., 2009; Power, 2004): good corporate govern-
ance assumes that following due processes and
installing appropriate risk controls is necessary in
order to avoid costly mistakes.
This is reflected in recommended “best practice”
on risk management, as captured by ISO 31000
(2009, p. v):
Organizations manage risk by identifying it,
analyzing it and then evaluating whether the risk
should be modified by risk treatment in order to
satisfy their risk criteria.
Throughout this process, they communicate and
consult with stakeholders and monitor and review
the risk and the controls that are modifying the risk
in order to ensure that no further risk treatment is
required.
The calculative rationality that governs risk
management is similar to that which drives
governance: economic actors select the optimal
risk treatment after an ex-ante exercise of risk
identification and evaluation. The ISO 31000
standard further elaborates (p. 10) that the design
of a risk management system is subordinate to the
form of corporate governance.
This double cascade from corporate governance
to project governance on the one hand and to risk
management and project risk management on the
other is reflected in the project governance literature
grounded in governance theory (Müller, 2011; Too
& Weaver, 2014), project risk management (Pich,
Loch, & Meyer, 2002; Winch & Maytorena, 2011;
 136 Stephane Tywoniak and Christophe Bredillet
Zwikael & Smyrk, 2015) and professional standards
(OGC, 2013; PMI, 2013).
Overall, the “first-order economizing” logic
offers a rational, comprehensive, and hierarchically
ordered set of decision-making heuristics, contrac-
tual forms, principles to allocate decision rights and
accountability, risk management best practices, and
controls through due process. Arguably, organiza-
tions that conform to this model should perform
better. In the face of recurrent failure, it could be
tempting to blame the inability of (project) man-
agers to perform in accordance with the model.
We suggest that a more fruitful avenue of investiga-
tion would be to challenge the model itself (Power,
2009).
Issues with the “First-Order Economizing”
Logic in Governance
As noted by Too and Weaver (2014, p. 1391): “sys-
temic project failure is a failure of organizational
governance.” They later argue that good project
governance aims to achieve an optimal balance
within and between: portfolio management, project
sponsorship, project management offices, and pro-
jects and programs. But that argument is just
a displacement of logic to a more detailed level.
The challenges faced by organizations do not stem
from the relevance or ambitions of “best practice”
standards but from their modalities of implementa-
tion (Bredillet, Tywoniak, & Dwivedula, 2015).
Theories and standards can help managers ask per-
tinent questions, but they may be poor guides to
action in themselves as they are often “ideal
types”: abstract conceptualizations that describe
how things would be and work in a perfect world
(Weber, 1978; Weick, 1979).
Both AT and TCE have been critiqued as “bad for
practice” (Foss, 1993; Ghoshal & Moran, 1996;
Nilakant & Rao, 1994) as they rely on assumptions
that do not reflect how human beings behave in
practice: managers do not have perfect foresight
(Foss, 2003), people do not always follow their self-
interest with guile – some behaviors are driven by
altruism and ethics (McGregor, 1960). Similarly,
there is insufficient empirical evidence that
“managers really make use of a transaction cost-
economizing calculus in making contracting
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decisions” (Tsang, 2006, p. 1009). Such arguments
lead Donaldson (2012) to argue there is an “episte-
mic fault line” in theories of governance built on
first-order economizing.
It is unlikely that, on its own, the ex-ante selec-
tion of a contractual form, based on a transaction
cost-economizing calculus, would lead to the suc-
cessful governance and management of an indivi-
dual project. Indeed, there is increasing empirical
evidence that projects governed by logic alternative
to AT and TCE perform better (Joslin & Müller,
2016; Miller & Hobbs, 2009; Samset & Volden,
2013).
Issues with the “First-Order Economizing”
Logic in Risk Management
The assumptions that guide the calculative ration-
ality of traditional risk management models have
also been challenged (ARPI, 2012; Barber, 2005;
Zinn, 2008). Following Knight (1921), scholars
have highlighted the need to distinguish between
knowable and unknowable futures1. Only those
risks that can be identified and analyzed based
on known probabilities can be effectively treated,
and make it to the risk manager’s register (Winch &
Maytorena, 2011). All other uncertainties are
ignored or, at best, assigned a contingency
(Ramasesh & Browning, 2014; Winch &
Maytorena, 2011; Zinn, 2008). Pich, Loch, and De
Meyer (2002) highlight that traditional project man-
agement models assume adequate information and
near-deterministic environments promote rational
risk management strategies sufficient for success.
However, they also note “the reality is that we live
in an ambiguous and complex world” (p. 1010)
where decision-makers face probabilistically
known risks, but also “unknown unknowns” which
escape traditional models and are consequently
often poorly dealt with. Empirical evidence sug-
gests that traditional project risk management tech-
niques on their own are not sufficient (de Bakker,
Boonstra, & Wortmann, 2010; Loch, DeMeyer, &
Pich, 2011).
1
For an insightful and comprehensive discussion of this
somewhat intricate topic, see Dequech (2011)

In sum, traditional risk management tools and
models are increasingly ill-fitted, due to their
restrictive assumptions (ARPI, 2012, p. 32):
The core assumption of modern risk management is
no longer adequate:
(a) risk is not about balancing probabilities and
costs on the basis that if something is improb-
able we shouldn’t spend too much; and
(b) some risks are so unthinkable the question is
not cost but how to spend to reduce
vulnerability.
In the next section, we discuss how thinking
about complexity leads to conceptualizations of
risk alternative to traditional approaches and their
implications for project risk management.
Toward a Second-Order Complexity
Approach to Project Risk Management
Knightian risks comprise only a fraction of the
uncertainty factors that project managers need to
consider. It has become customary to classify
these factors as follows (Ramasesh & Browning,
2014; Winch & Maytorena, 2011):
– Known unknowns: possible threats and
opportunities can be identified, but their impact
is unclear and no reliable data is available
regarding the probability of their incidence.
– Unknown unknowns: threats and opportunities
have not been identified and the cognitive state
is therefore ignorance.
– Unknown knowns: threats and opportunities
have been identified by others, but that informa-
tion is not disclosed to the decision-maker for
one reason or another.
As a consequence of these “unknowns,” project
managers face emergent issues, ambiguous cause-
effect relationships, and nonlinear effects. That is
to say, they face complexity (Érdi, 2007, p. 7;
Padalkar & Gopinath, 2016; Pich, et al., 2002).
Over the past two decades, the theme of complex-
ity has received an increasing amount of attention
among project management scholars (Baccarini,
1996; Cicmil, Williams, Thomas, & Hodgson, 2006;
Cooke-Davies, Cicmil, Crawford, & Richardson,
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Project Governance and Risk Management 137
2008; Jaafari, 2003; Pich, et al., 2002) and
practitioners (PMI, 2014; ICCPM, 2011). It is possi-
ble to categorize most scholarly contributions about
complexity and project management into one of two
categories:
(1) Complexity is either conceived as a property
of the world experienced by practitioners,
which can then be categorized, measured,
and possibly managed (Baccarini, 1996;
Geraldi, Maylor, & Williams, 2011; Jaafari,
2003),
(2) It is conceived as a way of thinking about the
world (Checkland, 2000; Chia, 2011; Cooke-
Davies, et al., 2008).
Complexity as a Property of the World:
First-Order Complexity
The view of complexity as a property of the world
is associated with realist/reductionist epistemolo-
gies (Richardson, 2011). This approach, through
detailed analysis, sophisticated models, and com-
puter simulations can yield valuable insights as
the models enable to understand situations where
cause and effect relationships are not direct
or obvious, or capture the influences of large num-
bers of items (Morecroft, 2015; Senge, 1990).
Following Bateson (1972), we use the label of
“first-order” complexity for this approach as it
considers complexity as a property of the external
environment. The logic of first-order complexity
is akin to that of first-order economizing.
Following Richardson’s (2011, p. 373) arguments,
first-order complexity may substitute nonlinear
models for the linear models of traditional risk
management and provide progress in terms of
analytical power, but offers little that is truly dif-
ferent from the traditional approach.
Complexity as a Way of Thinking About
the World: Second-Order Complexity
The alternative view begins from the assumption
that complexity resides in the environment being
considered, and also in the cognition of the human
actor/observer. Tsoukas and Hatch (2001) argue:
“one way of viewing organizations as complex
 138 Stephane Tywoniak and Christophe Bredillet
systems is to explore complex ways of thinking
about organizations-as-complex-systems, . . .
this view . . . we call second order complexity”
(Tsoukas & Hatch, 2001, p. 980, our
emphasis). Second-order complexity is associated
with interpretive/holistic epistemologies
(Richardson, 2011; Weick, 1995). It shifts our
attention from a perception of a world that is, to
a perception of a world that is becoming (Tsoukas
& Chia, 2002), and draws our attention to the
emergent and ever-changing nature of a complex
reality. Jackson (2003, p. 10) sums up the
difference between first-order and second-order
thinking: “If the only change that can be contem-
plated takes place in the context of an existing
mental model, then you are limited to bringing
about first-order learning. If, however, the mental
model itself can be changed, and purposes
radically altered, then second-order change is
possible.”
Shifting to a second-order complexity approach
to risk management entails moving to conceptuali-
zations of risk as socially mediated, constructed,
and transformed, treated through institutional and
discursive processes that assign meaning to techni-
cal analysis (Zinn, 2008, pp. 6–7). The difference
between the two approaches is illustrated by
O’Leary (2012), who distinguishes between two
models of project management: the systems control
model and the social trajectory model. In the
systems control model, the “project is a top-down
controlled system with a predictable path, which
moves through sequential lifecycle stages” and
“risks are managed through reducing uncertainty
and improving the plan”; while in the social
trajectory model, the “project is [the] outcome
of ongoing negotiation to agree [to] coordinated
collective action, and the project’s path is intrinsi-
cally unpredictable and iterative” and “perception
of risk varies and reflects [the] interests of [the]
most powerful” (O’Leary, 2012, p. 197).
Alternatives to Risk: Opportunity
and Resilience
As noted before, in traditional project management
the treatment of risk is primarily concerned with
avoidance and mitigation of negative outcomes
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(Parnell, 2009; Pich, et al., 2002; Sanderson, 2012;
Williams & Samset, 2012). But risk and risk-taking
are also associated with positive outcomes (Jaafari,
2001; Zinn, 2008), and it has been regularly
advocated that risk management should make way
to uncertainty management, which encompasses risks
as well as opportunities (Atkinson, Crawford, &
Ward, 2006; Hillson, 2002; Ward & Chapman,
2003).
Two separate disciplines in business and manage-
ment research hold the potential to enrich our
approach to risk, opportunity, and uncertainty
management.
Entrepreneurship, which has long drawn
attention to the “individual-opportunity nexus”
(Shane & Venkataraman, 2000), suggests that
entrepreneurial opportunities are developed
through processes of effectuation (Baker &
Nelson, 2005; Sarasvathy, 2001) where anticipa-
tion makes way for resourcefulness and processes
of design thinking, where uncertainty and
ambiguity are iteratively explored to tackle
challenges of ignorance (Aulet, 2013; Blank,
2013; Ries, 2011).
The second is high reliability organizations
(Bierly & Spender, 1995; La Porte, 1996; Roberts,
1990; Weick & Sutcliffe, 2011), which exhibit
long-term high performance in contexts of tight
coupling where the risk of “normal accidents”
(Perrow, 1984) is high. They do so by implementing
an approach to risk management that is focused on
resilience, rather than anticipation: “where risks are
highly uncertain and speculative, and remedies do
harm, however, resilience makes more sense
because we cannot know which possible risks
become manifest” (Wildavsky, 1988, p. 221).
We discuss in turn the potential contribution of
each to project risk management.
Uncertainty Management as Effectuation
Entrepreneurship has long embraced calculated
risk-taking as a positive factor in the success
of new venture projects (Mitton, 1984).
Entrepreneurs are not thrill-seeking risk-takers,
but rather aim for a level of risk they can
live with (Lyng, 2009; Sarasvathy, 2001).
In situations of uncertainty, it is to the advantage

of the entrepreneur to control what they can influ-
ence, for instance the level of loss they can
afford. This logic has been called “effectuation”
(Dew, Read, Sarasvathy, & Wiltbank, 2009;
Wiltbank, Dew, Read, & Sarasvathy, 2006).
The affordable risk principle of effectuation
reverses the traditional, prediction-based process
of risk management: entrepreneurs set a given
level of risk for their ventures, and then seek to
discover a path to success by acting in a creative
fashion (Sarasvathy, 2001). Successful entrepre-
neurs also tend to exhibit an internal locus of
control (Rotter, 1966), leading them to focus on
what they can control or influence, rather than try
to predict with precision how the environment
will change.
The logic of effectuation attempts to embrace
the uncertainty and emergence faced by entrepre-
neurs by reversing the logic of prediction. While
this may be appropriate for self-directed entrepre-
neurs, it may have limited application on the
whole in the goal-oriented context of project
management, except in “soft” projects where
goals are able to be evolved or are fuzzy
(Atkinson, et al., 2006), or when “agile” project
management (Fowler & Highsmith, 2001;
Highsmith, 2009) methods are used. The logic of
effectuation has the potential to assist in the direc-
tion of such projects as it focuses on limited
resources, affordable risk, changing goals, and
collaboration with stakeholders.
For “hard” projects, where goals are more
clearly defined, the logic of effectuation has
a different contribution to make: it invites us to
reverse the thinking process about risk by defining
the level of affordable loss before asking about the
level of risk entailed by the chosen solution.
The inception of the commercial SpaceX program
is an example of how this principle can be
mobilized in the context of a large complex space
exploration project (Anderson, 2013).
By asking project managers and sponsors what
amount they are comfortable losing in case of
failure, rather than how much they prepared to set
aside for contingencies, the logic of effectuation
triggers probing conversations about the project
that can assist in addressing the optimism bias
and strategic misrepresentation (Flyvbjerg, 2011;
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Project Governance and Risk Management 139
Sanderson, 2012) that have been identified as
major root causes of project failures.
Uncertainty Reduction as Design Thinking
The introduction of design thinking in entrepreneur-
ship was triggered by the failure of traditional
business plans for new ventures and challenging
“[t]he assumption . . . that it’s possible to figure
out most of the unknowns of a business in advance,
before you raise money and actually execute the
idea” (Blank, 2013, p. 67). Design thinking substi-
tutes a logic of discovery to the logic of prediction,
and suggests that the unknowns associated with
ignorance can be learned about in this process.
The logic of learning and discovery from design
thinking has the potential to balance out the logic
of analysis and prediction.
The possible contribution of design thinking to
agile project management has been identified
(Bosch & Bosch-Sijtsema, 2011) as providing
a methodology to structure the development
process.
Design thinking also has a contribution to make
to the management of risk in “hard” projects: the
logic echoes with the concerns raised about the need
to invest at the front end in order to improve the
chances of project success (Miller, Lessard,
Michaud, & Floricel, 2001; Samset & Volden,
2013; Williams, Samset, & Sunnevåg, 2009).
Design thinking is different from traditional stage-
gate models where the robustness of plans and
assumptions are probed through expert questioning.
Instead, it helps confirm the project plan through
a series of feedback iterations with stakeholders.
Another appeal of design logic is its nimbleness:
the approach of fast prototyping enables the gather-
ing of quick feedback on incomplete/unfinished
plans and adjust accordingly. Design thinking as
a learning cycle is open-minded: unlike traditional
project planning techniques such as the waterfall or
V-models (Hass, 2009), the methodology does not
assume that success criteria are known at the outset,
but accepts that they are discovered through dialo-
gue with stakeholders. Therefore, design thinking
provides a potentially powerful remedy to project
failure caused by the “normalization of deviance”
(Pinto, 2014).
 140 Stephane Tywoniak and Christophe Bredillet
Managing Uncertainty through Resilience
High reliability organizations (HROs) are charac-
terized by error-free operations over extended time
periods in hazardous environments (Roberts,
1990). HROs face high uncertainty and complex-
ity, while working in a tightly coupled system
characterized by: “time dependent processes,”
“invariant sequence of operations,” “one way to
reach a goal,” and “little slack” (Roberts, 1990,
pp. 108–109). The similarity between the tightly
coupled systems of HROs and the constraints of
projects captured by master schedules, work
breakdown structures, and the “iron triangle” of
time, cost and quality, is striking.
Weick and Sutcliffe (2011, p. 10) argue that
HROs exhibit the following characteristics: “preoc-
cupation with failure, reluctance to simplify inter-
pretations, sensitivity to operations, commitment to
resilience, deference to expertise.” We examine
each in turn.
Preoccupation with failure. HROs are seeking to
learn from their failures, large and small, in
a systematic way. They do not wait to investigate
root causes and lessons learned, in a climate where
transparency is rewarded more than absence of
failure.
Reluctance to simplify interpretations. HROs’
control systems conform to Ashby’s law of requisite
variety (Ashby, 1968). When the information is
simplified, it is more difficult to notice unexpected
events.
Sensitivity to operations. HROs are mindful of
“latent failures” (Reason, 1990), loopholes in the
fine-grained details of plans, procedures, briefings
and procedures.
Commitment to resilience. HROs accept that, in
an uncertain world, failures will occur, but instead
of investing in foresight and anticipation, they
invest in capabilities to detect, contain, and learn
from errors. Resilience also involves a degree of
redundancy, in order to loosen up the tight coupling
in the system (Roberts, 1990).
Deference to expertise. HROs are mindful of
context: in normal times, decisions follow hierarchy,
but migrate to decentralized expertise in high tempo,
and to a predetermined emergency structure in times
of crisis. They combine flexibility and orderliness.
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The HRO model resonates well with the lessons
learned about managing risks in megaprojects noted
by Priemus, Bosch-Rekveldt and Giezen (2013),
who highlight issues of redundancy, resilience,
and adaptation. HROs provide a practical template
for thinking in a complex way about complex envir-
onments, characterized by uncertainty and sur-
prises. HROs achieve mindfulness by balancing
foresight and resilience through an attention to fail-
ures, rich interpretations sensitive to operational
detail, by responding to errors quickly, and by
building a degree of redundancy so that the system
does not break down if a small failure occurs.
HROs provide a template to manage risk through
rapid effective response, rather than extensive
anticipation.
Second-Order Complexity Project Risk
Management
The three approaches discussed above provide tem-
plates to manage risk in a novel way, consistent
with second-order complex thinking. The logic of
effectuation invites project managers and sponsors
to focus on what they can control and to determine
the level of risk they are comfortable with (afford-
able loss principle). The logic of design thinking
provides a process of learning and discovery for the
objectives, specifications, and success criteria for
the project, in collaboration with stakeholders: it
enables dissolving uncertainty-as-ignorance in
a synthetic manner, as expressed by Ackoff (2001,
p. 344): “problem dissolution consists of redesign
of the system that has the problem or its environ-
ment in such a way as to eliminate the problem,
precluding the possibility of its reappearance.
Design is to synthetic thinking what scientific
research is to analytic thinking.” Finally, the
template of HROs provides an approach that
emphasizes curing errors as they happen, through
continuous learning and improvement.
The arguments discussed here are mapped out in
Figure 10.1 below, where we contrast first-order
and second-order challenges (risk v. uncertainty) and
first-order and second-order response strategies (man-
agement v. reduction). The matrix in Figure 10.1
illustrates how the second-order approach enriches
and broadens that of the first-order.

Reduction Second order
Strategy
Management First order
Figure 10.1. First-order v. second-order risk approaches.
The approaches of effectuation, design thinking,
and HROs entail a shift in thinking about risk man-
agement from foresight, anticipation, and preven-
tion to discovery, learning, and resilient problem
solving. They suggest different governance choices,
which we turn to in the next section.
Second-Order Complexity Project Risk
Governance: Toward Governability
Defining Governability
Second-order complexity logic shifts the focus from
the form of governance to the governability of the
form: “Building governability relies on second-
order strategic thinking, in which sponsors think
through each relationship and organizational device
for its ability to trigger appropriate responses should
turbulence arise” (Floricel & Miller, 2001, p. 138).
Miller and Hobbs (2009, p. 386) define governabil-
ity as: “the capacity of project participants to steer
through unexpected turbulence when projects face
changing conditions.”
A number of recent publications have highlighted
approaches to governance that underline issues of
process and strategic choice (Child, 1972) to
achieve governability. Governance is no longer
a choice of form matching an environmental context
through a contingent process of rational choice
(Too & Weaver, 2014; Williamson, 1975, 1991)
but a process of design to customize form to
a preferred purpose and process (Narayanan &
DeFillippi, 2012). This perspective is exemplified
by Samset and Volden (2013, p. 17), for whom
project governance “refers to the processes, systems
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Project Governance and Risk Management 141
Effectuation Design Thinking
Traditional Project HRO
Models
First Order Second Order
Risk Uncertainty
Challenge
and regulations that society (the financing party)
must have in place to ensure that projects are suc-
cessful.” Attention is directed toward purposeful
processes, rather than entities; toward organizing,
rather than organization (“Think ‘ing’”, Weick,
1979, p. 42).
The transition to governability highlights
a process of learning in order to design the appro-
priate form: “we look not only at a project but
at how the project governance framework is
constructed to fit the organisation and its environ-
ment” (Williams & Samset, 2012, p. 2). The choice
of contracts and sign-offs, which were the starting
point of the first-order economizing logic,
become the outcome of the second-order complex-
ity logic.
Governability in Practice
This logic is exemplified by recent cases of large
complex projects including the delivery of
Terminal Five at Heathrow Airport by BAA, and
the 2012 London Olympics. Brady and Davies
(2014) describe how the sponsors of both projects
sought to avoid the failures of the past and
embarked on learning journeys to shift the
mindsets that directed how they would go about
managing projects, in a way that is consistent
with second-order thinking:
The T5 Agreement was designed to encourage
collaboration and the creation of innovative solu-
tions to problems that would inevitably arise on
such a complex and uncertain project and avoid
the practice of seeking additional payments and/or
entering into legal disputes over changes in scope,
 142 Stephane Tywoniak and Christophe Bredillet

which were found in the more adversarial relation-
ships that typified construction practice in the
United Kingdom. (Brady & Davies, 2014, p. 27)
The contractual arrangements that BAA designed
fully acknowledged the limitations of foresight and
the inevitability of errors consistent with the HRO
model, and sought to promote problem-solving col-
laborative relationships in ways that were consistent
with design thinking principles.
The latest report on the Norwegian State Project
Model and the progressive implementation of its
quality assurance scheme (Samset & Volden, 2013)
further supports the arguments presented here. Since
2000, the Norwegian government has implemented
a quality assurance scheme for all major public
investment projects, which require approval at two
decision gates: QA1 (conceptual approval by the
Cabinet) and QA2 (approval of detailed plans by
Parliament) – see Figure 10.2 below:
The innovation of the Norwegian State Project
Model is to complement a traditional stage-gate
decision model with a process of quality assurance
involving external expert auditors. During this pro-
cess, auditors probe the assumptions of plans with
a level of attention to process and detail comparable
to the HRO model: “there is also an emphasis on
exchange of information, sharing of expertise and
development of expertise among civil servants
involved in the scheme. An important incentive
mechanism is that the government may refuse to
consider the proposed project if it is not analyzed
and documented well enough” (Samset & Volden,
2013, p. 18).
Samset and Volden (2013, p. 31) note that imple-
menting the scheme led to significant improve-
ments: “total net saving for the projects taken as
a whole was more than 3 billion NOK, or about 7%
of the total investment.”

Conceptual Appraisal
• Needs analysis
• Possibilities study Decision documents
• Strategy document • Overall strategy
produced by responsible
• Requirement spec. document
ministry/agency
• Alternatives analysis • Budget

Cabinet Parliament
decision approval

Needs Pre-project Project Effect

QA 1: QA 2:
Review: documents Review: documents
Analyze: economic analysis Analyze: management strategy
uncertainty success factors and
Assess: relevance uncertainty
feasibility Recomm.: budget, contract and Scope of external
sustainability management strategy quality assurance
timing
Recomm: ranking
management strategy

The State Project Model involves only to overarching decision points at the highest decision
level. This ensures authority, while flexibility for those responsible is maintained.

Figure 10.2. The Norwegian State Project Model – Stage Gate Approval process. (Copyright Samset &
Volden (2013: p. 20) – used with permission)

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The authors conclude: “The QA scheme in its
current configuration appears to be suitable for
the purpose for which it was designed. However,
governance regimes should not be static. They need
to be flexible so that they can be altered if they
do not work as intended or if changes in operating
conditions and characteristics of the projects
should necessitate change” (Samset & Volden,
2013, p. 48).
Consistent with the contributions reviewed
above, Miller and Hobbs (2009) highlight the short-
comings of “rational choice” logic compared with
the benefits of “evolutionary project shaping” logic:
“the perspective of rational planning fosters the idea
that changes are not only bad, but are signs of bad
management” (Miller & Hobbs, 2009, p. 383).
On the other hand, in the evolutionary project shap-
ing logic: “sponsors start with initial concepts that
have the possibility of becoming viable. They then
embark on shaping efforts and debates to refine,
reconfigure, and eventually decide on a concept
that will yield value while countering risks.
The seeds of success or failure are thus planted
early and nurtured as choices are made” (Miller &
Hobbs, 2009, p. 384). Again, this is consistent with
the principles of effectuation and HROs as efforts to
reduce uncertainty through learning and discovery
are highlighted.
In conclusion, Miller and Hobbs (2009,
pp. 387–388) provide seven examples of govern-
ability devices that can be used to steer a project
through risk, uncertainty, and ambiguity:
1. Ownership arrangements and incentives that
induce partners to respond in ways to protect their
investments . . .
2. The building of coalitions and the inclusion of
parties that have an interest in taking actions to
ensure the success of the project . . .
3. The presence of slack, callable or deep-pocket
financial resources to face needs as they arise . . .
4. Access to a rich array of possible strategic
responses to emergent threats and opportunities . . .
5. Broad functional specifications that make it
possible for owners or contractors to propose inno-
vative solutions . . .
6. Contracts with governments, clients, or investors
that specify actions to be taken in the case of
difficulties . . .
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Project Governance and Risk Management 143
7. Flexible project design and modularity that make
it possible to reduce the scope and size of projects,
should difficulties arise.
From Governance to Governability
In relation to project governance, adopting the
perspective of second-order thinking suggests
a transition from form to process, organization to
organizing, and governance to governability.
Project governance is no longer the rational deter-
mination of the most appropriate form ex ante, but
the managerial process of learning about the best
governable structure for the project. This challenges
traditional thinking about project governance: it
suggests that project governance, rather than being
a rational choice of form to minimize transaction
costs, can also be a contested terrain between stake-
holders attempting to influence each other (Clegg,
2008), a process of learning (Pemsel et al., 2012), or
a problem-solving mechanism (Ahern, Leavy, &
Byrne, 2014).
Conclusion: From The Governance
of Risks in Projects to How Uncertainty
Management and Reduction Shape
Project Governability
This chapter has argued that the first-order econo-
mizing logic assumes a foresight capability and
a calculative rationality that fails to reflect the chal-
lenges that leaders of projects and project-based
organizations face in practice. The chapter suggests
that concepts from entrepreneurship (effectuation
and design thinking) and high reliability organiza-
tions, can help overcome the epistemological fault
line (Donaldson, 2012) of traditional models of
governance and risk management in projects.
Doing so requires a transition along two axes: in
terms of the challenges faced by managers, we need
to move away from a narrow conceptualization that
only considers known and calculable risks to all
unknowns; and from a strategic standpoint; we
need to open up our range from the narrow view
that risks are given and need to be treated to the
broader perspective that risks are socially
 144 Stephane Tywoniak and Christophe Bredillet
constructed (Sarasvathy, 2001; Winch &
Maytorena, 2011; Zinn, 2008) and need to be
reduced/dissolved (Ackoff, 2001; Jackson,
2003). Second-order complexity draws our atten-
tion to the level of risk that managers can afford,
the processes of learning how to define goals and
success factors, and how to design resilient project
organizations capable of addressing failures as they
occur and learn in fast cycles to match the contin-
gencies of their environments.
The perspective outlined in this chapter offers
a framework to integrate (Figure 10.1) the perspec-
tives on risk management and governance that were
identified in previous reviews of the literature
as falling outside the first-order economizing
mainstream (Ahola, et al., 2014; Müller, 2011;
Too & Weaver, 2014) into a holistic framework.
The arguments provided here enable us to
connect governance and risk management to
other emerging themes of organizational project
management research, including project-based
organizations as problem-solving organizations
(Ahern, et al., 2014), institutional challenges
(Scott, Levitt, & Orr, 2011), and projects-as-
practice (Hällgren & Söderholm, 2011). Second-
order complexity provides a platform to accom-
modate new business models in project-based
organizations, including CoPS (Miller, Hobday,
Leroux-Demers, & Olleros, 1995), and the transi-
tion from product-led outcomes to service-led
outcomes and client-contractor relationships to
joined-up business partnerships, where contrac-
tors need to deliver to the changing business
needs of a client, rather than a defined outcome
(Alderman, Ivory, McLoughlin, & Vaughan,
2014).
This chapter investigated the issues from
a scholarly perspective and reviewed a broad range
of academic (and practitioner) publications from the
perspective of the interactions between project gov-
ernance and risk management. Some of the conclu-
sions put forward go beyond this narrow remit and
we would welcome complementary perspectives on
governance other than risk management to inform
the second-order complexity perspective outlined
here. Beyond the studies reviewed, we would wel-
come the opportunity to further explore the issues
from the perspective of practitioners.
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at https://www.cambridge.org/core/terms. https://doi.org/10.1017/9781316662243.014
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 PART III

People

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 INTRODUCTION TO PART III
Shankar Sankaran
The management of people is as a key factor that
contributes to the success of projects at any level in
an organization. Part III includes topics from pro-
minent authors from areas that are allied to OPM,
such as sociology, psychology, and human resource
management, where the authors discuss various
aspects of people and their activities in OPM.
Part III starts with Chapter 11 “Human Resource
Management in Organizational Project Management:
Current Trends and Future Prospects” by Anne
Keegan, Martina Huemann, and Claudia Ringhofer.
Their chapter discusses recent research linking HRM
and OPM to identify key themes that differentiate
HRM at a project level from OPM at an organiza-
tional level. The authors also identify current gaps in
research related to HRM and OPM and propose a
research agenda that would help in enhancing the
OPM capability of an organization.
This is followed by Chapter 12, “Stakeholders”
by Pernille Eskerod, who highlights the importance
of changing the approach for dealing with stake-
holders in an OPM environment. She proposes
a stakeholder-centric approach in dealing with
a network of stakeholders, which is more effective
in an OPM environment, as opposed to a project-
centric approach that focuses narrowly on the rela-
tions between a project and its stakeholders at the
project level.
Chapter 13 deals with another important aspect of
the people aspect of OPM – leadership. Ralf Müller,
Johan Packendorff, and Shankar Sankaran empha-
size the need for a balanced attitude to leadership in
an OPM context in this chapter, “Balanced
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Leadership: A New Perspective for Leadership in
Organizational Project Management,” by proposing
the need for a balance between the leadership of
a vertical leader (at management level) and horizon-
tal leaders (at team level). They propose a four-step
process, outlining the intra- and interpersonal activ-
ities for vertical and horizontal leaders at each of
these steps.
This chapter is followed by a discussion on teams
in the context of OPM, “Project Teams and Their
Role in Organizational Project Management.”
Nathalie Drouin and Shankar Sankaran argue in
Chapter 14 that while the project management
literature has focused on studying teams within
projects, we also need to consider the relationship
between functional teams and project teams in an
OPM environment as there will be need for cross-
functional collaboration.
Managing knowledge acquired and created by peo-
ple for organizational purposes is another key aspect
of OPM. This is illustrated in Chapter 15 by Ed
Hoffman and Jon Boyle, “REAL Knowledge at
NASA: A Knowledge Services Model for the
Modern Project Environment.” It describes how
knowledge management is implemented in NASA to
create an effective project environment in the context
of OPM.
Julien Pollack argues that we need to examine the
different roles that change management plays in OPM
as opposed to the basic process of delivering a project
technically in Chapter 16, “Change Management as
an Organizational Project Capability.” He argues that
a fundamentally different approach is required to
151
 152 Shankar Sankaran

successfully implement change management at an Following a discussion on behavioral aspects,

organizational level, which will need engagement
and emergence as opposed to the current control-
focused view used in managing change in projects.
In Chapter 17, “The Behavioral ‘Glue’ in OPM:
A Review of Productive Behaviors of Project
Team Members,” Timo Braun discusses the
behaviors required in OPM. The chapter discusses
four types of antecedents required for productive
behavior: trust, culture, team characteristics, and
environmental conditions. It also proposes
a research agenda to carry out interdisciplinary
research in OPM.
Chivonne Algeo and Julia Connell propose the
establishment of special interest groups within
industry clusters to facilitate knowledge sharing –
an innovation to contribute to the theory and prac-
tice of OPM – in Chapter 18, “Developing
Organizational Project Management Competencies
through Industry Clusters.”
The eight chapters in Part III cover an array
of interdisciplinary concepts and strategies that
can help to increase the capability of OPM in
an organization to successfully deliver its
strategies.

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 CHAPTER
11
Human Resource Management
in Organizational Project
Management
Current Trends and Future Prospects
ANNE KEEGAN, MARTINA HUEMANN, and CLAUDIA
RINGHOFER
Introduction
It is increasingly common for work activities to take
place in projects, and projects are therefore of grow-
ing importance as sites for career development, for
leading and managing professional workers, and for
individual and organizational development. Links
between human resource management (HRM)
activities that occur on projects, and their broader
implications for project-based organizations in
terms of knowledge, learning, and competence
development, are therefore important foci for
research. Projects are also important from the per-
spective of the well-being, ethical treatment, and
motivation of workers.
Projects are established within and between
organizational functions (Bredin & Söderlund,
2011) but also span organizational boundaries
(Lundin & Steinthórsson, 2003; Swart &
Kinnie, 2014). Projects involve people from
within and between organizational departments
and also within and between disciplinary special-
ties. The implications of project-based organizing
for managing human resources would appear to
be significant (Huemann, 2015; Keegan,
Huemann, & Turner, 2012; Palm & Lindahl,
2015; Söderlund & Bredin, 2006; Vicentini &
Boccardelli, 2014), and yet traditional HRM
models, where projects are not a key considera-
tion, continue to dominate mainstream HRM the-
orizing (Swart & Kinnie, 2014). In mainstream
HRM theorizing, traditional long-term and stable
employment relationships are assumed and focal
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organizations are those with clearly defined inter-
nal and external boundaries.
Project management literature has also tradition-
ally downplayed what could be called the human
factor – human capital or people aspects of project
organization and management (Keegan & Turner,
2003). A shift from the mainly technical to increas-
ingly people-focused aspects of project manage-
ment has, however, been discernible in the past
decade (Huemann, Keegan, & Turner, 2007).
Project management researchers have started to
explore more systematically HRM issues and their
possible contribution to the performance of organi-
zations that do most of their work in projects
(Bredin & Söderlund, 2011). The systematic study
of project professionals’ careers has developed
recently, reflecting an increased appreciation of
the importance of projects as a major part of many
organizations (Crawford, French, & Lloyd-Walker,
2013; Hölzle, 2010) and the resulting increased
importance of HRM issues and “people capabil-
ities” (Bredin, 2008) required of project-based orga-
nizations is slowly increasing. Similarly, even
though HRM theorists have not, to date, fully
embraced the importance of the project context for
practices, processes, and outcomes, this too appears
to be changing as studies of HRM become more
contextually sensitive. We are witnessing what
might be regarded as the beginning of a general
reorientation away from universal best practices
and toward more contextually sensitive HRM
research (Boxall & Purcell, 2011; Kroon &
Paauwe, 2014; Paauwe, 2004; Watson, 2010).
153
 154 Anne Keegan, Martina Huemann, and Claudia Ringhofer
Our goal in this chapter is to provide an added
stimulus to recent efforts to bridge the separate
literatures of HRM and OPM. While the links
between these fields are slowly attracting sustained
interest from researchers operating from both
domains (Bredin & Söderlund, 2011; Huemann,
2015; Keegan et al., 2012; Pinto, Dawood, &
Pinto, 2014; Swart & Kinnie, 2014), much remains
to be done in terms of research on HRM practices
and processes in a project-based context.
We therefore discuss findings from recent research
on HRM in Organizational Project Management
(OPM) and identify key themes and areas for further
investigation.
This chapter is organized along two major themes
that are of significance in recent work on HRM in
OPM. First, we identify a distinction in the literature
regarding HRM at the project level (Huemann,
2015; Keegan et al., 2012; Palm & Lindahl, 2015)
and HRM at the broader organizational level
(Bredin & Söderlund, 2011; Swart & Kinnie,
2014). While highlighting research that deals with
the processes and practices at both levels, we also
discern a growing interest in the project level.
The second major theme is the multiactor nature
of HRM (Meijerink, Bondarouk, & Looise, 2013),
which is perhaps more evident in project-based
organizations than in other settings. We discuss
research that indicates there is considerable com-
plexity in terms of HRM influence distribution
(Dany, Guedri, & Hatt, 2008) in a project context
and review findings from research on the actors
involved in project-based HRM and the challenges
they face. We then draw out the dominant theore-
tical lenses used to study HRM in terms of OPM.
We highlight gaps that exist between these
approaches in the project management literature
and those evident in the broader HRM literature.
On this basis, we offer a research agenda for how to
go forward and deepen knowledge and insights on
this important area of project management and
HRM research.
HRM, Projects, and Organizations
We can distinguish between two foci in the litera-
ture on HRM and project-based organizations. One
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focus is that of HRM processes and practices on
projects. The second is a focus on the organizational
level whereby links between HRM in projects and
HRM issues in the broader organization such as
corporate strategy, strategic and functional capabil-
ity development, and organizational development,
are important (Bredin, 2008; Swart & Kinnie,
2014). Our contention is that both these foci are
vital to understanding the impact of HRM on
OPM in practice and in theory.
HR Processes and Practices on Projects
Until recently, the project has to some extent been
seen as a black box in terms of HRM. This is likely
because of the inherently temporary or finite nature
of projects (cf. Bakker, 2010; Turner & Müller,
2003; Winch, 2014) and the assumption that HRM
policies and practices should have a permanent
character. This assumption is in line with the fact
that HRM research developed over several decades
in the context of functional and permanent organi-
zational structures and these continue to dominate
how HRM is understood to work (Keegan &
Boselie, 2006). An exploration of the project itself
as a site for HRM-related activity has in turn been
viewed in terms of generally narrow technical
aspects such as, for example, training techniques
(Tabassi & Bakar, 2009) and safety requirements
for projects (e.g., Lai, Liu, & Ling, 2011).
Explicitly conceptualizing the project as
a temporary organization (Bakker, 2010;
Huemann, 2015; Turner & Müller, 2003; Winch,
2014) has created a basis for researchers exploring
HR processes and practices specific to projects in
a more strategic manner (Bredin & Söderlund,
2011), and also in terms of broader issues such as
the ethical treatment of workers and their well-
being (Huemann, 2007; Turner, Huemann, &
Keegan, 2008). Articulating the idea of the project
as a workplace (Palm & Lindahl, 2015 or as a career
(Huemann, 2015) changes the focus on project-
specific HRM practices and processes from
a largely technical and resource allocation issue
to a focus on whether and how project-specific
practices contribute to the long-term development
of personnel, satisfaction of career goals, and
 Human Resource Management in OPM 155

Table 11.1 Challenges and Potentials of Project Work

Opportunities for Project

Characteristics of Projects as Work Place Challenges for Project Professionals Professionals

High goal orientation, result focus • Overcommitment, burnout • Intrinsic motivation

• Source of commitment
• Providing sense
Uncertainty/novel • Stress • Adventure
• Learning possibilities
High degree of responsibility • Feeling of being left alone, no support • Freedom and empowerment
Multirole assignments • Project overload, stress • Variety of roles
• New challenges
Source: Based on Huemann, 2015.

achievement of competence development of balance (including their personal health-related

broader relevance to the organization. The project,
when viewed as a temporary workplace, can be seen
as a specific work context with characteristics
including high goal orientation, uncertainty, high
degree of responsibility, and multirole assignments.
These features create opportunities but also
challenges for project professionals. Following
Huemann (2015), the project as a workplace has
the following characteristics as presented in
Table 11.1.
For example, according to Asquin et al. (2010),
projects elicit high levels of individual commitment
because the time-limited nature of projects creates
urgency and stirs individuals to action, giving them
clear objectives to be fulfilled against challenging
deadlines and through teamwork. A similar conclu-
sion is drawn by Lindgren and Packendorff (2006),
who studied project personnel in an IT consultancy
context. They found that the project work practices
are premised on rationality, efficiency, and control
as well as high levels of personal commitment to
project work. As a result of project work structures
eliciting high degrees of personal responsibility,
researchers hold that the challenges of project
overload are especially high in organizations that
perform small- to medium-sized external projects,
where project personnel work simultaneously in
more than one project (Lindgren & Packendorff,
2006; Turner et al., 2008; Zika-Viktorsson,
Sundström, & Engwall, 2006). Project personnel
need to take greater responsibility for their work
(in terms of task completion), their work–life
well-being), and their careers (Bredin &
Söderlund, 2011; Turner et al., 2008).
However, projects also represent opportunities
for project professionals. If projects, supported by
professional project management methods, are
introduced in an organization, this can lead to
increased commitment, dynamism, support, and
solidarity among personnel working in project
teams toward joint goals (Hovmark & Nordqvist,
1996). Projects are motivating for project personnel
(Bredin, 2008). The time-limited goal-orientation
they construct provides the members of the project
organization with clear objectives to be fulfilled
using teamwork. Project work can create a sense
of meaning for project personnel as their own con-
tribution to achieving project outcomes is often
highly visible for them due to the immediate and
holistic aspects of project work compared with
functionally structured work (Huemann, 2015).
However, using projects to organize work requires
new and different HRM practices and processes
compared with traditional, functionally structured
organizations.
Huemann et al. (2007) developed a broad
framework for considering HRM practices and
processes specific to the project, including
processes for assigning personnel to projects,
for managing performance on projects (e.g.,
developing, appraising, and rewarding), and for
dispersing personnel from projects. Assigning
personnel to the project constitutes the project
from a human resource perspective and helps

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 156 Anne Keegan, Martina Huemann, and Claudia Ringhofer
the project to come into existence. While formal
assignment processes often exist in practice, they
found that practices and processes for dispersing
personnel at the end of projects are often not
explicitly organized by companies. The dispersal
function we envisage may be similar in nature
and principle to the outplacement function in
traditional organizations, where employees are
facilitated to move from work to work in organi-
zations with active employability processes
(Peters & Lam, 2015). Failure to actively facil-
itate project-to-project mobility creates the
potential for insecurity among personnel and
loss of valuable knowledge and expertise
acquired by personnel who leave the organization
at this time. This is also the case for project
personnel working on projects on a secondment
or contracting basis which is quite common
(Keegan & Turner, 2001).
The topic of project-related training and develop-
ment (e.g., Brière, Proulx, Flores, & Laporte, 2015
Buganza, Kalchschmidt, Bartezzaghi, & Amabile,
2013; Tabassi & Bakar, 2009; Tabassi, Ramli, &
Bakar, 2012) has also been described in some detail
in the literature. Research by Tabassi and Bakar
(2009) suggests that most of the workers involved
in construction projects are unskilled and that fun-
damental problems and barriers exist in terms of
offering integrated training for project personnel.
Barriers include:
high expenses of construction training courses,
financial problems, short-term contracts of the
workers, large number and various types of con-
struction learning points, low level of labor educa-
tion, lack of incentive among the workers for
training, inadequate relations between the contrac-
tor or client and the labor, little attention from the
client on the importance of skilled labor in projects,
and time-consuming” (Tabassi & Bakar, 2009,
p. 476).
Their research suggests that 77 percent of construc-
tion projects faced financial problems due to the use
of unskilled project personnel and indicates that
skilled labor plays an important role in decreasing
the cost of construction projects.
Research by Buganza et al. (2013) pointed to the
important effect that training can have in improving
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project manager behaviors. Their research provided
evidence that the relationship between training
effectiveness and the frequency of displays of effec-
tive managerial behavior is influenced by the com-
patibility between training activity and the role of
trainees on the one hand and the context in which
trainees operate on the other. They suggest organi-
zations should pay close attention when designing
(managerial) training activities so these are consis-
tent with trainees’ roles and the environmental con-
ditions in which trainees operate, as these have an
impact on the effectiveness of the training.
Reward and performance management practices
and processes, including appraisal, are somewhat
underdeveloped as topics in both mainstream
HRM writing on the project context and in project
management literature dealing with HRM issues.
Huemann et al. (2007) found that project managers
have limited formal discretion for rewarding per-
sonnel for project-related performance. Their dis-
cretion extends mainly to formal use of budgets for
celebrating project successes (e.g., achieving
a milestone) or informally using their influence to
suggest to others (e.g., line managers) that a project
professional deserves some form of additional com-
pensation. Considerably more research is needed on
issues such as appraisal and reward practices and
processes on projects.
Table 11.2 lists the practices and processes asso-
ciated with HRM in projects reported in the
literature.
HRM Practices and Processes Linking
the Project and the Organization
Where project-based organizations and HRM are
a focus of attention, Vicentini and Boccardelli
(2014) note that issues are often framed in terms
of latent forms of organization of relevance to pro-
jects. Theorists therefore focus on the (more) stable
context within which projects are embedded includ-
ing, for example, project ecologies (Grabher, 2004)
and networks (Swart & Kinnie, 2014). Researchers
have sought to determine how the broader structures
(e.g., networks and project ecologies) provide the
backdrop to finite project-based relationships and
 Human Resource Management in OPM 157

Table 11.2 Summary of HRM Processes Practices on Projects Identified in the Literature

Project HRM
Processes Project HRM Practices Relevant Publications

Assigning • Project resource planning Bredin & Söderlund, 2011; Eskerod & Jepsen,
• Recruiting people for project 2005; Huemann, 2010; Huemann, 2015; Keegan
et al., 2012; Laslo, 2010; Turner, Huemann, &
• Voluntary enrolment in projects
Keegan, 2007; Turner et al., 2008
• Use of skill matrices
Developing • Team-building: e.g., practices for encouraging team Brière et al., 2015; Buganza et al., 2013; Calamel,
members to meet up during the project Defélix, Picq, & Retour, 2012; Huemann, 2010;
• Training: diversity training, training in evaluation Huemann, 2015; Keegan et al., 2012; Lai et al.,
and refocusing self-learning interviews, conflict 2011; Minbaeva, 2005; Popaitoon & Siengthai,
resolution techniques, intercultural awareness 2014; Tabassi & Bakar, 2009; Tabassi et al.,
2012; Turner et al., 2007, 2008
• Training on project-related skills
• On-the-project training, sending trainers on site
• Organizing opportunities for learning on a project
• Opportunities to exercise project leadership
• Opportunities to develop professional reputation
Appraising • Feedback – 360-degree feedback Huemann, 2010; Huemann, 2015; Keegan et al.,
• Formal project appraisals 2012; Medina & Medina, 2014; Turner et al.,
2007, 2008; Wickramasinghe & Liyanage, 2013
Rewarding • Rewarding the team: e.g., group bonus-based on (Huemann, 2010; Huemann, 2015; Keegan et al.,
project team performance 2012; Lai et al., 2011; Popaitoon & Siengthai,
• Rewarding team members for their accomplishments 2014; Turner et al., 2007, 2008; Zwikael &
Unger-Aviram, 2010
• Nonmonetary rewards: e.g., social events, awards
certificates, extra holiday time, additional training or
development opportunities, explicit links to future
project opportunities; chance to contribute to
important decisions
Dispersing • Practices for capturing knowledge at the end of Eskerod & Jepsen, 2005; Huemann, 2010;
project – particularly from temporary workers Huemann, 2015; Keegan et al., 2012; Turner
• Assign to a new project et al., 2007, 2008
• Return personnel to the line to perform functional
duties
• Send personnel to the bench

offer continuity and stability for the finite and
transient conditions facing mobile project workers
(Borg & Söderlund, 2015).
Processes and practices linking HRM in the
project and HRM in the permanent organization
are described in literature (Huemann, 2013;
Huemann et al., 2007; Swart, & Kinnie, 2014;
Turner et al., 2008). From the perspective of the
broader organization, Swart and Kinnie (2014)
conceptualize a networked HRM model in
which human capital can be deployed by organi-
zations operating within a network at a network
level as well as within individual firms (Swart, &
Kinnie, 2014). Their work highlights the reliance
of the network on the human capital of each firm
while at the same time focusing on the network
implications of human capital development and
deployment. Bredin (2008), in a similar fashion,
addresses the question of how project organiza-
tions might build broad capabilities for managing
projects by exploiting more effectively people
capability across projects and maintaining
a focus on the strategic interactions between dif-
ferent forms of capability. People capability is

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 158 Anne Keegan, Martina Huemann, and Claudia Ringhofer
seen as emerging at the intersection of strategic
capability, project capability, and functional cap-
ability (Bredin, 2008).
In this stream of work, HRM practices and
processes at the organizational level – at the cross-
project and even cross-organizational levels – are
the key focus. For example, Ballesteros-Pérez,
González-Cruz, and Fernández-Diego (2012) dis-
cuss the use of sociometric techniques for HRM
allocation across multiple projects. This method
supports the project manager in decision making
regarding the selection of the project team, from
the perspective of social interactions. Ballesteros-
Pérez et al. (2012) aimed to further develop the
sociometric technique, focusing on the need to
assign staff to different projects from a pool of
available human resources, with the objective to
choose the most effective combination of people
from the perspective of social interaction.
One of the major themes dealt with in recent
literature is the necessity of conceptualizing the
integration between HRM practices at the level of
the project (e.g., assigning personnel to a project)
and the broader implications of such decisions at
individual and organizational levels. The links
between specific project assignments and career
development of the individual (Calamel et al.,
2012; Crawford et al., 2013) or knowledge sharing
and transfer for the organization (e.g., Borg &
Söderlund, 2015) are some examples. In terms of
HRM in the project and links to careers, Dainty,
Raidén, and Neale (2009) describe the importance
of relationships between the deployment of
project personnel and broader career management
processes at the organizational level. They suggest
that for effective management, a systematic and
concurrent combination of organizational, project,
and employee data is required in order to make
appropriate resource allocation decisions.
Similarly, Bredin (2008, p. 573) argues that “finding
ways to match the short-term requirement of the
projects, with the careers and individual develop-
ment of employees ought to be important activities
of the people management system” (emphasis
added). Keegan et al. (2012) support this idea with
their assertion that decisions made regarding project
assignment are of strategic importance to meeting
individual career interests of project professionals.
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A development strategy for project personnel may
be premised on projects being explicitly used as
learning opportunities and stepping stones within
the career paths that organizations offer. Career
systems and incentive systems suitable for support-
ing OPM could therefore be built on using experi-
ences developed on projects in different career
fields to support project management careers and
professionalization (Hölzle, 2010; Jones &
DeFillippi, 1996; Larsen, 2002).
Decisions regarding the assignment of person-
nel to projects also have fairness implications
for employees and managers and may shape
employee diversity outcomes at the organizational
level. The reasons for this include that informal
processes emerge from empirical evidence as
playing an important role in project assignment
(Bredin & Söderlund, 2011; Keegan et al., 2012).
As employees seek to arrange assignment to pro-
jects for personal and career-related reasons,
they are motivated to be proactive in seeking out
suitable assignments and often need to manage
these processes at an informal and highly decen-
tralized level. This creates a possible disconnect
between the formal processes of project assign-
ment arranged at an organizational and at an
intended level (Purcell, & Hutchinson, 2007) and
practices realized by the actions of decentralized
actors including employees (Arthur & DeFillippi,
1998; Keegan et al., 2012). Therefore, an area of
significant research in terms of links between
HRM in projects and HRM at the broader organi-
zational level is the research describing processes
and practices for the management of careers in
project-based organizations.
In light of this, researchers have recently
suggested a number of specific interventions for
career development that consider the links between
project-specific and broader organizational aspects.
For example, in a recent study, Calamel et al. (2012)
describe practices including the appointment of
career-tracking officers to monitor project profes-
sionals’ movements between projects and career
implications. They emphasize the importance
of regular interviews for evaluating project
professionals’ desire to move from one project to
another. Crawford et al. (2013) also identify the
need for tailored career interventions, including

the appointment of mentors, to address specific
issues facing project managers with different char-
acteristics, i.e., in terms of gender and age. Hölzle
(2010) identifies career interventions for developing
social and leadership competencies of project pro-
fessionals and recommends integration of
a mentoring model for project managers with man-
datory support of project managers by higher-
ranked project managers. This is needed so that
development on projects is integrated into overall
development in terms of the strategic needs of the
organization.
While the literature indicates the importance gen-
erally of linking HRM in the project with career
development issues, we think care is required in
avoiding the suggestion that one-size-fits-all frame-
works necessarily work. Bredin and Söderlund
(2013), for example, theorize that the type of pro-
ject-based organization might moderate the appro-
priateness of particular career management models.
They differentiate two archetypes of career devel-
opment models known as the competence strategy
model and talent management model. The emphasis
of the competence strategy model lies on the needs
of the organization, the strategic evolution, and
growth areas. In contrast, the talent management
model focuses more on the individual requirements
and the ways to support the individual development
process and less on the strategic evolution of the
firm.
In earlier work, Bredin and Söderlund (2011)
found that line managers act as both technical
leaders as well as mentors to project workers. This
happens in intrafunctional projects while line
managers in interfunctional projects tend to focus
on longer-term competence development and career
development in their units. The latter focus less on
technical leadership and day-to-day mentoring
activities. As such, their empirical research suggests
that the specific type of career support required is
likely to differ from setting to setting.
In their empirical study, Keegan et al. (2012)
highlighted the HRM roles of both line and project
managers. They saw a clear HRM role for project
managers in terms of employee well-being and
career development, given the proximity of project
managers to employees and their line of sight to
employees’ career-related concerns and decisions.
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Human Resource Management in OPM 159
They identified tensions between the long- and
short-term foci of project managers’ HRM respon-
sibilities as a source of potential difficulties, with
career development of particular concern for project
workers as an issue spanning different specific
projects.
Dainty et al. (2009) highlight the interactions
between practices for project assignment and prac-
tices for career development to make an explicit link
between what happens in projects and how this
influences competence development more broadly
for OPM. They recommend practices for aligning
project assignment practices to ensure individual
and organizational needs are dual foci of project
assignment and career decisions. Broader fairness
and transparency as well as equity issues involved
in project assignment decisions and their links with
diversity management and career development were
also noted in the study by Keegan et al. (2012).
Recent research theorizing on the kinds of com-
petencies project professionals require for success-
ful careers raises some interesting issues. For
example, based on an exploratory study of workers’
interpretations of the nature of their work in engi-
neering consultancies, Borg and Söderlund (2015)
identify levels of “liminality competence” of differ-
ent project workers. These are seen as influential in
how workers approach assignments. They are also
relevant for workers’ framing of assignments, and
this in turn shapes the opportunities they see and can
exploit in terms of their careers and opportunities.
These competencies are therefore important for
organizations in managing knowledge transfer.
Liminality competence refers to the ability of pro-
ject workers to cope with the transient nature of
project work, an issue also raised in research by
Keegan and Turner (2003). While Bredin and
Söderlund (2014) do not provide concrete sugges-
tions for how HRM professionals might support the
development of liminality competence of employ-
ees, their work suggests a potential for further the-
oretical and practical developments in this area.
Huemann (2015) describes more generally that pro-
ject-oriented careers are fragmented careers and
stresses that the responsibility for career develop-
ment rests primarily with the project professional,
which points to a need for research that examines
how HRM professionals align to these emerging
 160 Anne Keegan, Martina Huemann, and Claudia Ringhofer

Table 11.3 Summary of HRM Practices and Processes Linking the Project and the Project-Based Organization

HRM Process HRM Practice Relevant Publications

Recruiting/selecting • Considering project management relevant Brière et al., 2015; Dainty et al., 2009; Huemann,
behaviors when recruiting/selecting future 2010; Huemann, 2015; Kang, Snell, & Swart,
project personnel 2012; Keegan et al., 2012; Lai et al., 2011;
Medina & Medina, 2014; Turner et al., 2007,
2008
Allocating • Company-wide portfolio management (resource Ballesteros-Pérez et al., 2012; Costa, 2013;
planning), many models Dainty et al., 2009; Huemann, 2010; Huemann,
• Categorization of project types in order to match 2015; Keegan et al., 2012; Turner et al., 2007,
adequate project personnel 2008

Developing • Standardized PM training; leadership training
• Assessment/development centers of Project
Managers and team members
• Developing work experiences
• Training on the project (site)
• Internal promotion (co-location)
• PM certification
• Career management
Bredin & Söderlund, 2013; Brière et al., 2015;
Buganza et al., 2013; Dainty et al., 2009; Foss,
Minbaeva, Pedersen, & Reinholt, 2009;
Huemann, 2010; Huemann, 2015; Keegan et al.,
2012; Medina & Medina, 2014; Popaitoon &
Siengthai, 2014; Tabassi & Bakar, 2009; Tabassi
et al., 2012; Thompson & Heron, 2006; Turner
et al., 2007, 2008; Wickramasinghe & Liyanage,
2013

Appraising • Recognition of competence required on project Huemann, 2010; Huemann, 2015; Keegan et al.,
• Performance measurement 2012; Turner et al., 2008
• Performance appraisals
Rewarding • Establishment of payment structures, incentive Calamel et al., 2012; Huemann, 2010; Huemann,
system, performance management system that 2015; Keegan et al., 2012; Lai et al., 2011;
consider projects explicitly Medina & Medina, 2014; Popaitoon & Siengthai,
• Reduction of status differentiation 2014; Turner et al., 2008
• Recognition of competences acquired on projects
• Assignment to a project to enable learning
Releasing • Capture knowledge at the end of project, Huemann, 2010; Huemann, 2015; Keegan et al.,
particularly from temporary workers 2012; Turner et al., 2008
• Some companies maintain network of temporary
workers

types of career models where liminality, transience,
and fragmentation are key features. Finally, the
specifics of dynamic bridging HRM processes and
practices may also change with the project maturity
of an organization (Huemann, 2010).
HRM Actors in OPM
The second major theme emerging in recent years is
that of HRM actors in project management and the
roles they play. The prevailing understanding of
HRM actors in mainstream HRM literature is that
multiactor HRM systems are important (Meijerink
et al., 2013), and also that there is a golden triangle
between HRM practitioners (specialists), line man-
agers, and employees (Jackson, Schuler, & Werner,
2011).
This golden triangle provides a dominant framing
of HRM actors and influences distribution (Dany
et al., 2008). It has become gradually translated
into a generalized conceptualization that HRM
specialists develop intended policies, line managers
are mainly responsible for actual or implemented
practices, and employees perceive practices (Nishii
& Wright, 2007; Purcell & Hutchinson, 2007).

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Empirical research in the context of project-based
organizations suggests a much wider range of actors
as having roles in both policy development, and
in HRM enactment and implementation tasks in
OPM. Actors identified include line managers,
senior managers, project managers, specialist HR
personnel, and employees (Bredin & Söderlund,
2011; Keegan et al., 2012; Lai et al., 2011). Given
the high levels of decentralization in terms of tasks
and supervision, and the extent of boundary span-
ning work activity in project-based organizations,
HRM tasks and influence over policies and prac-
tices appear to be quite diffuse and spread across
actors in and beyond the HR department and line
management.
A useful framework for capturing this increased
complexity is the “HR Quadriad” developed by
Bredin and Söderlund (2011), which highlights
the roles of line managers, employees, project
managers and HR specialists. Huemann’s work
(2010) further identifies the diffuse nature of
actors involved in HRM when she describes the
importance of the portfolio group, expert pool
managers, the project management office, and
the project academy, as shaping HRM processes
and practices. The project owner/client may also
play an important role in HRM practices and
processes, and project workers/team members
are clearly involved in implementing HRM tasks
(Keegan et al., 2012).
HRM Task and Influence Distribution
The project-based organization is an especially
challenging HRM context because of the interplay
of actors carrying out different HRM tasks and
influencing different levels of policy and practice
development. Added to this, very little empirical
research has been carried out to date on the over-
arching role of the HRM function in this context, or
how HRM specialists coordinate the activities of
different actors. Bredin and Söderlund (2011,
2013) stress that HRM should be a collaboration
between HR specialists, line managers, project
managers, and project workers. They differentiate
two configurations of HRM coordination based on
whether project work is intrafunctional or
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Human Resource Management in OPM 161
interfunctional. As more work in an organization
is carried out in projects, more of the HRM respon-
sibilities of the HRM specialist are handed over to
others, including line managers and project workers
and, to some extent, to project managers (Bredin &
Söderlund, 2013). To the extent that situational
factors encourage a task rather than people orienta-
tion in project manager leadership behavior (Yukl,
2012), this could form a barrier to effective HRM in
an OPM context. The role of the HRM department
is also clearly changing in this context, but details
are lacking regarding precisely what this means for
HRM actors or the possible configurations of HRM-
related activities.
In the mainstream literature, there is an increased
tendency to highlight the devolution of HRM to line
managers. In the project-based context, the HRM
department needs to set policy and provide gui-
dance, consultancy, and advice not only for line
managers but for all actors involved. Given the
diffusion of responsibilities, it is also likely it
needs to advocate and protect employee well-
being and act as an arbiter in disputes and conflicts
(Keegan et al., 2012; Turner et al., 2008). Whether
and how it does this remains unclear from current
research. Limited empirical research does suggest
there are contextual differences in HRM role dis-
tribution and interplay, depending on the organiza-
tional structure of the company and particularly on
the kinds of projects that are undertaken (Keegan &
Turner, 2002). The average size and duration of
projects and the understanding or philosophy of
the HRM department all appear to play a role in
how HRM in these settings takes shape and can, or
does, influence OPM (Bredin & Söderlund, 2011;
Keegan et al., 2012).
The HR roles of project managers remains
somewhat unclear from current literature. Keegan
et al. (2012) argue that project managers carry out
HRM tasks de facto, which is unsurprising given
their daily contact with and influence over the
motivation and performance of project workers.
However, they also acknowledge that in most
cases project managers are not given formal
responsibility for HRM. Bredin and Söderlund
(2011) also see a possible role for project
managers, but emphasize the changing role of
line managers much more in their framework,
 162 Anne Keegan, Martina Huemann, and Claudia Ringhofer
leaving the HRM role of project managers some-
what underspecified.
Brière et al. (2015) conceptualize at a general
and quite abstract level a range of competencies
that project managers operating in international
nongovernmental organizations need, including
change management, team building, and commu-
nication skills. Zhang, Zuo, and Zillante (2013)
studied the social competencies of project
managers in construction projects and argue that
leading others and social awareness is important
for project managers.
To the extent that project managers’ leadership
behavior influences project workers’ abilities, moti-
vation and opportunities to perform, the HRM roles
of project managers remains a critical issue.
Researchers to date, with few exceptions, have not
yet adequately explored this issue. The project man-
agement office may play a more or less important
role in the HRM system depending on the level of
readiness of the HRM department to embrace
a project-orientation (Huemann, 2010). Academic
research highlights the importance of the HRM
tasks by the PMO office, especially if the HRM
department does not provide adequate HRM sup-
port for OPM (Huemann, 2010; Huemann, 2015).
To support a high level of project orientation,
Huemann (2010) suggests that the HRM function
needs to be structured as a project-oriented HRM
unit. This involves a more networked form of
operating in terms of dealing with and supporting
a wider range of HRM relevant actors including
project managers and workers. Research by Swart
and Kinnie (2014) also provides suggestions in this
direction.
The distance of HR specialists from operations in
intrafunctional project settings can prevent the
effective coordination of different HR actors.
Bredin and Söderlund (2011), for example, showed
that HRM specialists are valued as expert advisors
in interfunctional project settings, and that HR
should acknowledge and support HRM roles of
project managers in intrafunctional settings more
substantially, a finding also supported by the work
of Keegan et al. (2012).
Swart and Kinnie (2014) conceptualize the
boundaries of contemporary HRM models at an
extraorganizational network level and argue that as
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work activities take place across organizations in
networks, appropriate HRM models need to be
developed for these contemporary contexts. They
identify three models: buffering the network,
borrowing, and balancing.
Finally, the operationalization of ”management
by projects” as an explicit HRM strategy impacts
the organization of HRM, especially in terms of the
HR department. The HR department can no longer
be seen as a functionally organized administrative
function. It should acquire an increasingly net-
worked character to manage cooperation among
multiple actors in a distributed, networked HRM
setting.
Arguably, the HRM department must itself
operate in a project-oriented manner, and the HR
department will increasingly need to apply projects
and professional project management to organize
the required cooperation between actors in net-
worked project-based settings (Huemann, 2015).
To date however, few studies of HRM in OPM
have addressed these emerging issues.
A more networked form of HRM system with
a clear interplay between HR managers, the project
management office, and project managers is per-
haps required. This would facilitate a viable struc-
ture for raising the HR-related issues that support
OPM, project managers, project workers, and others
operating in tandem in this context. The systematic
incorporation of project learning opportunities,
and seeing projects as sources of potential employee
motivation and opportunity to perform (Appelbaum,
Bailey, Berg, & Kalleberg, 2000) would be more
likely to occur.
In addition, the HRM function could play a role
in addressing systematically the well-being and per-
sonal challenges of managing projects for project
personnel (Pinto et al., 2014). These challenges
emanate from the uncertainty/novelty of project
work, fragmented careers, and multirole assign-
ments (Keegan et al., 2012; Turner et al., 2008;
Zika-Viktorsson et al., 2006). The search for
balance between organizational and employee well-
being needs (Francis and Keegan, 2006), which
exist in a paradoxical relationship to each other
(Aust, Brandl, & Keegan, 2015), would be actively
stimulated when the HRM specialists focus on
employees also as a key stakeholder.

Discussion
In the past decade, more attention has been paid by
researchers to HRM in project-based organizations.
However, despite calls for increased contextual sen-
sitivity on the part of HRM researchers (Boxall &
Purcell, 2011; Keegan & Boselie, 2006; Paauwe,
2004), the context of project work is still not
a mainstream topic in HRM research. While
there is an increased interest in project work and
the project work environment (Vicentini &
Boccardelli, 2014), HRM theorists do not focus
a great deal on this context, and mainstream HRM
theorizing is still based mainly on assumptions that
tend not to hold in the project context (Huemann
et al., 2007; Swart & Kinnie, 2014). From recent
research, which we have discussed throughout the
chapter, some recurring issues arise that merit dis-
cussion in the following sections.
Based on an examination of research linking
HRM and OPM, more attention should be given to
HR practices and processes in projects. We do not
mean that attention should be paid only to the tech-
nical aspects of project management, such as allo-
cating people to projects using simulation models,
or project-specific technical training. Rather, atten-
tion should be focused on the importance of the
project as a site of work activity from the perspec-
tives of motivation, ability, opportunity, well-being,
fairness, and development, which are core to HRM
theorizing in general. Undoubtedly, some of these
issues are beginning to attract researchers’ attention
(Bredin, 2008; Pinto et al., 2014), but much remains
to be done.
A stronger emphasis on HRM specifically
focused at the project level would be a positive
development for the following reasons. First, the
current discussion in mainstream HRM theorizing
focuses on the difference between intended and
implemented HRM practices (Nishii & Wright,
2007; Purcell & Hutchinson, 2007). A focus on
HRM activities specifically in projects can address
a gap between the kinds of HRM processes and
practices at an organizational-, network-, and
macrostructure level as reported by HRM man-
agers, and those practices and processes that multi-
ple actors are engaged in day to day, in terms of
project HRM. Line managers and project managers
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Human Resource Management in OPM 163
have different perspectives on how HRM is imple-
mented. These perspectives need to be acknowl-
edged and, where necessary, aligned.
Second, HRM practices at the project level are
the practices that are most proximal to workers.
These are the practices that workers perceive and
encounter. They may therefore have large effects in
terms of outcomes of interest, including project
and organizational performance. In terms of the
well-being of project professionals, fairness and
the sustainability of work practices are important
(Ehnert, 2009). More team-based research would
also be valuable, given the growing prominence of
project-based work in general, and especially in
knowledge-based industries.
However, to the extent that HRM theorists have
begun to systematically address the project work
context, in the past few years we observe that this
has mainly been from a managerialist perspective
(Delbridge & Keenoy, 2010; Greenwood, 2013).
The emphasis is focused on how to improve the
functioning of organizations by developing
appropriate HRM systems to enhance efficiency
and effectiveness of resource deployment and
development. Swart and Kinnie (2014, p. 293)
argue, for example, that “[t]he raison d’être of
a configuration of HRM practices is to enable
effective working both individually and collec-
tively,” and put forward an organizational and
managerial perspective.
The theoretical perspectives that dominate the
study of HRM in OPM are quite narrow compared
with the range of theories used generally in the
HRM field that include theoretical approaches
from both managerial and critical perspectives
(Deetz, 1996). While managerial and unitarist
perspectives tend to dominate HRM research
(Keegan & Boselie, 2006; Lengnick-Hall,
Lengnick-Hall, Andrade, & Drake, 2009;
Marchington, 2015), there has been a broadening
of perspectives in recent years to include critical
HRM perspectives (Delbridge & Keenoy, 2010);
ethical HRM perspectives (Greenwood, 2013;
Guest & Woodrow, 2012); and perspectives such
as sustainable HRM (Ehnert, 2009; Kramar,
2014). To date, these theoretical lenses have not
been widely adopted by theorists studying HRM
in OPM.
 164 Anne Keegan, Martina Huemann, and Claudia Ringhofer
One exception is the article by Asquin et al.
(2010) exploring the question of when project-
based management causes distress to actors in the
organization. The authors focus on the emergence
of “dual” organizations and argue that the use of
projects to achieve competitive advantage has
a cost for organizations as well as employees in
HR systems. Both have to evolve in order to
accommodate new and more cross-cutting operat-
ing systems that challenge their personnel in many
ways. Considering that permanent and temporary
organization coexist, they argue that the HRM
function needs to move from a uniform bureau-
cratic model to flexible and tailor-made,
temporary, project-based HR support: “[t]hus an
organization’s ability to operate effectively on
a cross-functional basis relies on the ability of
HRM systems to incentivize and recognize the
human resources involved in activities that diverge
from the standard organizational models” (Asquin
et al., 2010, p. 172). There is much opportunity
still for enriching the field of HRM in OPM with
insights on issues such as worker health-related
well-being associated with HRM systems
(Ehrnrooth & Björkman, 2012) and sustainable
employment practices (Ehnert, 2009) in project-
based organizations. Whether and how discourses
of HRM and/or OPM enable or constrain balanced
attention to well-being and ethical HRM issues as
well as performance HRM issues is a question that
requires further exploration. If studies on the
emerging “textscape” of HRM business partnering
are an accurate reflection, then prevailing manage-
rial discourses of HRM constrain discussion and
debate on well-being and ethical HRM issues
(Keegan & Francis, 2010). Given that project-
based organizations are characterized by both
uncertainty and ambiguity, which is likely to influ-
ence employees’ experiences of their workplace in
not always a positive way (e.g., Pinto et al., 2014;
Zika-Viktorsson et al., 2006), explicit attention to
employee issues of well-being and ethical treat-
ment are very important (Greenwood, 2013).
Structural breaks between temporary and perma-
nent parts of the organization require balancing
many aspects such as short-term- and long-term
orientation, stakeholders with different interests,
social and economic interests, and individual and
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organizational interests (Huemann, 2015). These
are likely to create pressures at emotional and
cognitive levels for organizational members.
However, project management discourses
themselves, which are highly rationalistic and
functionalistic (cf. Hodgson & Cicmil, 2006) in
orientation, may constrain attention to these
aspects. This is also worth considering in future
research endeavors.
Within the more traditional managerial domain,
HRM research is inspired by a wide variety of
micro- and macrotheories (Wright & Boswell,
2002), including economic theories (e.g., resource-
based view, human capital theory), institutional
theory (Boselie, Brewster, & Paauwe, 2009), and
in the past ten years especially organizational psy-
chology and organizational behavior theories
(Godard, 2014; Marchington, 2015). The focus on
employee behavior as a key factor mediating the
link between HRM practices and organizational
performance is now one of the main topics in
HRM theorizing (Bowen & Ostroff, 2004; Purcell
& Hutchinson, 2007). A focus on individual
behavior includes attention to the importance of
organizational citizenship behaviors (OCBs); e.g.,
helping and courtesy, proactivity, and prosocial
behavior. Factors contributing to individuals’ moti-
vation, ability and opportunity to perform are seen
as critical foci for HRM research in the mainstream
literature (Purcell & Hutchinson, 2007). However,
these theoretical approaches are only beginning to
inform writing on HRM and OPM. Pinto et al.’s
(2014) study on how managerial and supervisory
support buffers employees’ well-being is one of the
rare studies informed by an organizational behavior
(OB) perspective on HRM in a project setting
(Geare et al., 2014).
Overall, project management research on the
topic of HRM is still mainly approached from
a narrow technical perspective focused on effi-
ciency in resource allocation in project manage-
ment. The use of critical theoretical perspectives
on HRM in OPM is not well developed and this
contrasts greatly with developments in the broader
field of HRM. There is evidence in current research
of an emphasis on unitarism and managerialism,
and these perspectives could usefully be challenged
or at least supplemented by more critical theoretical

perspectives (e.g., Hodgson & Cicmil, 2006).
Perspectives on HRM in OPM that pursue
a stakeholder perspective and emphasize issues
such as fairness and legitimacy (Godard, 2010)
would also be merited in a context where it appears
that employees and managers often confront serious
challenges in terms of levels of work stress and
intensity (e.g., Zika-Viktorsson et al., 2006).
Given that the wider field of project management
has begun to systematically incorporate insights
from critical theory (Hodgson & Cicmil, 2006) per-
haps there is potential for a more critical or dissen-
sus-oriented perspective on HRM in OPM to be
developed in the future (Keegan & Boselie, 2006).
The incorporation of a capabilities theoretical per-
spective for HRM (Bredin, 2008) is also promising
as an indication that new insights on HRM in
a project-based context are being developed, as is
the focus on the individual employee level and the
incorporation of a perspective on well-being in the
recent work of Pinto et al. (2014).
In terms of research designs and methodologies,
most work on HRM and project-based organiza-
tions is centered on fairly conventional qualitative
and quantitative methods. Interview-based (e.g.,
Keegan et al., 2012) and case study approaches
(e.g., Bredin & Söderlund, 2011) are common.
Studies based on surveys (e.g., Calamel et al.,
2012) are also common.
Less evident as research methods are, for example,
(critical) discourse analysis (Alvesson & Karreman,
2000; Fairclough, 2003; Keegan & Francis, 2010),
multilevel statistical analysis (Sanders, Shipton, &
Gomes, 2014), diary studies (Tadić, Bakker, &
Oerlemans, 2014), and ethnographies (McCann,
Granter, Hassard, & Hyde, 2014), to name just
a few. We see potential for enriching the study of
HRM in OPM when researchers expand their reper-
toire of methods to explore novel and interesting
research questions in a contextually sensitive way,
developing new knowledge in this emerging field of
management activity.
A Research Agenda for HRM in OPM
Based on our discussion of current issues and the
trends in the literature on HRM in OPM we have
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Human Resource Management in OPM 165
presented, we use this section to offer a research
agenda based on four sets of priorities that we see as
salient for the development of this field of study.
These priorities demonstrate a need for a broader
range of theoretical lenses to study HRM in OPM,
for broader research methods and designs, for the
range of actors involved, and their interactions, and
finally for the dynamic and paradoxical aspects of
managing HRM in OPM.
A Broader Range of Theoretical Lenses
for Studying HRM in OPM
The HRM literature, whether mainstream, critical,
or ethical in orientation, provides rich intellectual
resources for HRM research and theorizing
in the context of project-based organizations.
Insights from mainstream OB-inspired HRM can
enrich our understanding of the roles of line and
project managers in facilitating employee behavior
(Keegan & Den Hartog, 2004; Purcell &
Hutchinson, 2007). Insights from critical manage-
ment studies, for example, from labor process per-
spectives, remind us of the conflicting outcomes in
HRM systems, which are currently at least as plau-
sible as mutual gains (Ehrnrooth & Björkman,
2012; Ramsay, Scholarios, & Harley, 2000).
Research on the differences between intended,
enacted, and perceived HRM practices are likely
to help us understand the gaps that may occur
between the development of HRM policies and
how individual workers perceive them (Bowen &
Ostroff, 2004; Nishii & Wright, 2007). However,
we caution against the wholesale importing of
ideas from mainstream and critical or ethical
HRM as, without adequate recontextualization
to a project setting, this is not likely to lead to
insights that help researchers or practitioners.
To that extent, a thorough understanding of the
literature on project management, project manage-
ment philosophy and discourse, and project based/
project-oriented organizations from a contextual
perspective is essential. This should underpin
systematic and novel theoretical insights on HRM
in OPM. Finally, although social systems theory
has rarely been used in research on OPM and
HRM, we see potential for further development of
this perspective (Huemann, 2015).
 166 Anne Keegan, Martina Huemann, and Claudia Ringhofer
A Broader Range of Research Methods for
Studying HRM in OPM
Mainstream OB-inspired HRM research drawing on
sophisticated multilevel analysis can be of value in
testing if the outcomes found in nonproject contexts
that are linked to HRM practices are replicated in
a project context. There are gaps in our knowledge
currently about how HRM actors in project settings
interact (Keegan & Den Hartog, 2004).
Understanding of their priorities as well as the
values shaping them (Pohler & Willness, 2014) is
not well developed. Inductive and context-sensitive
research methods are needed. The use of discourse
analysis, for example, is low in studies of HRM in
a project setting. Discourse analytic studies have
been valuable in showing how the framing of
HRM practices can lead to certain practices and
processes developing in organizations compared
with others (e.g., practices and processes for pro-
tecting employees) (Alvesson & Kärreman, 2007;
Keegan & Francis, 2010; Watson, 2010). Discourse
analysis could help reveal the values framing how
project and line managers orient to the HRM roles
and what priorities are emphasized in a project set-
ting as well as how these link to broader societal
discourses (Alvesson & Karreman, 2000).
Attention to a Broader Range of Actors
Involved in HRM in OPM
Mainstream HRM writing is increasingly acknowl-
edging the importance of multiactor HRM systems
(Meijerink et al., 2013). The emerging research on
the range of HRM actors in a project-based organi-
zation can clearly inform this type of research.
Insights on how they interact and coordinate their
activities would be welcome (Bredin & Söderlund,
2011; Keegan et al., 2012; Swart & Kinnie, 2014).
This is a highly dynamic area of HRM in OPM.
The complexity of HRM roles and tasks, and influ-
ence distribution between actors are only slowly
beginning to emerge. Much more research is
required to untangle the interactive effects of pro-
ject, line management, employee, and HRM inter-
actions in terms of the outcomes they shape.
Research in this complex field is currently rare (cf.
Den Hartog, De Hoogh, & Keegan, 2007) but likely
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to be of practical and theoretical value to under-
standing how HRM might facilitate OPM as well
as the outcomes for employees of management
practices and processes in this field.
The Need for Increased Focus on Dynamic
Aspects of HRM for OPM
The dynamic aspects of linking project HRM and
the broader organizational aspects of HRM, and
also to the experiences of individual project profes-
sionals and workers, are currently undertheorized.
Recent research suggests the importance of linking
not only project and organizational HRM, or project
and individual-level outcomes, but also of placing
project organizational HRM in an even broader
context of the networks and project ecologies
(Grabher, 2004) within which project-based organi-
zations are embedded (cf. Swart & Kinnie, 2014).
This indicates a vast area of research that still needs
to be done in terms of how HRM unfolds at different
levels in the organization and the linkages between
these levels. Further, this research is required not
just to ensure the development of the project
management body of knowledge but also the devel-
opment of the HRM body of knowledge, which
must gradually adapt its orientation toward
organizations to consider more systematically the
importance of context generally, and particularly
the contexts of the project, and the project-based
organization.
Conclusion
The topic of HRM in OPM is an important and
dynamically emerging area of research. In this
chapter we have discussed that it is increasingly
common for work activities to take place in projects
and described research on the links between HRM
activities that occur on projects and broader impli-
cations for project based organizations. While it is
clear that, to date, the implications of project-based
organizing for managing human resources are
somewhat underexplored, we see trends suggesting
that HRM aspects of project organizations are
beginning to attract sustained systematic attention.
Findings from recent research on HRM in OPM

suggest that research on HRM at the project level is
gaining attention in light of the idea of the project as
temporary organization (Turner & Müller, 2003).
The attention being paid to HRM at a broader orga-
nizational and network level (Swart & Kinnie,
2014), reflecting the ideas of projects and project
professionals as embedded in a broader, more per-
manent context (Sydow, Lindkvist, & DeFillippi,
2004), is also a critical area of development and
fertile discussion. The multiactor nature of HRM
in project-based organizations aligns with well-
developed discussions in mainstream HRM writing
on the increased tendency to devolve HRM to line
managers (e.g., Larsen & Brewster, 2003; Renwick,
2003). The increasing importance of other actors in
HRM systems that has gained attention in main-
stream HRM theorizing in recent years (Meijerink
et al., 2013) is clearly of great importance in under-
standing HRM in OPM.
We have offered suggestions for research on
HRM in OPM to increase our knowledge and enrich
our insights on this important area. Broader theore-
tical insights, more and innovative research meth-
ods, and research that goes beyond managerialism,
are all potentially valuable for improving the quality
of research on HRM in OPM. Finally, we encourage
an increased focus on the dynamic and emergent
aspects of HRM in OPM to provide insights that
shed light on how project workers and managers can
cope cognitively and emotionally with the uncertain
and ambiguous aspects of working and managing
human resources in this setting, which is linked with
dualistic short- and long-term pressures, and contra-
dictory people and project performance pressures.
Finally, there is reason to be optimistic that with
a willingness on the part of researchers to adopt
wider theoretical perspectives, and draw insights
from critical as well as mainstream HRM research
methods and findings, the prospects for future
research on HRM in OPM are positive indeed.
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 CHAPTER

12
Stakeholders
PERNILLE ESKEROD

Introduction Afterwards, a section on stakeholder management

issues in project-based organizations is offered.
Purposeful interactions with people who can affect This is followed by a section in which a case study
or be affected by project processes or project out- is used to illustrate the challenges and solutions
comes, i.e. the project stakeholders, within related to stakeholder management in project-
a project-based organization, is a core task in all based organizations. Next comes a section that con-
project management (Littau et al., 2010; PMI, 2013; trasts a project-centric approach with a stakeholder-
Huemann et al., 2016) – and has been so since centric approach. Finally, the chapter is concluded
Cleland (1985, 1986) wrote about ongoing project by pointing to managerial implications.
evaluation and project stakeholder management.
In order to understand how project-based organi-
The Basic Tenets of Project Stakeholder
zations can integrate multiproject management
Management
activities to enhance strategic alignment, proper
portfolio and program management and govern-
Many definitions on project stakeholders exist.
ance, i.e. can apply an Organizational Project
In this chapter (and inspired by Freeman, 1984;
Management (OPM) approach (Aubry et al.,
Eskerod & Jepsen, 2013; and Eskerod, 2014),
2007), an understanding of how to deal with the
a project stakeholder is defined as any individual,
stakeholders is of utmost importance.
group, or entity who can affect or be affected by
Realizing that OPM is dealing with the how-
the project process or the project outcomes. It is
question, in terms of how project, and portfolio man-
important to notice that the definition includes all
agement practices can strategically help firms realize
individuals, groups, and entities related to the pro-
organizational goals (Chia, 2013), a stakeholder man-
ject, regardless of whether they are internal or
agement perspective on OPM must deal with stake-
external to the project-based organization at
holders involved in project, program, and portfolio
hand. Further, the definition points to the fact
management practices. In line with the recommenda-
that a stakeholder is not necessarily a single
tion of going beyond the management of single pro-
human or a homogeneous unit, but may be a group
jects by additionally considering management of
or an entity. This implies (which is an important
networks of projects, internal as well as external,
insight for understanding stakeholder management
and multiple projects (Andersen & Jessen, 2003),
in an OPM approach) that the stakeholder – in the
and realizing that skillful and competent project
same way as the focal organization – may consist of
management of the single projects is not enough
multiple layers.
(Cooke-Davies et al., 2001), the starting point
Project stakeholders play an important role
of this chapter is to understand the limitation
in project-based organizations for a number of
of a classical project-centric approach to stakeholder
reasons. Four significant reasons (Eskerod et al.,
management within project-based organizations. This
2015b) are:
chapter proposes that the project-centric approach
should be replaced with a stakeholder-centric (1) the project needs contributions (financial and
approach. non-financial) that are controlled by the stake-
In the next section, the basic tenets of project holders, e.g. project funding, manpower,
stakeholder management are presented. Thereafter expertise, approvals, good ideas, compliance,
follows a section on stakeholder behavior. and correct usage of project deliverables;

172

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(2) stakeholders’ (potential) resistance may cause
risks and negatively affect the project process
or outcomes;
(3) the project may affect stakeholders in many
ways, both negative and positive, intended and
non-intended; and
(4) stakeholders establish their individual criteria
for assessing the success of the project.
Based on the above reasons for dealing with
project stakeholders, two purposes of interacting
with them become clear: (1) to procure contribu-
tions controlled by the stakeholders and needed by
the project, and (2) to ensure that stakeholder
interests and concerns are carefully considered
(so that they are not putting the project at risk;
they are not harmed unintentionally; and they will
assess the project as a success) (Eskerod &
Larsen, 2016).
The basic idea underlying project stakeholder
management is that the people acting on behalf of
the project – let us call them project representa-
tives – can increase the likelihood of success
(regardless of the measures of success applied)
by influencing the stakeholders (see e.g. PMI,
2013). The stakeholder is assumed to have free
will, that is, the power of choice (Barnard, 1938)
on whether to provide the contributions they
control or not. Therefore, the project representa-
tives must try to figure out how they can make the
stakeholders provide their contributions.
(Realizing that the stakeholder may consist of
multiple individuals and layers that may not be
aligned within the stakeholder entity makes this
task even more difficult.)
It would be much easier to perform effective
stakeholder management if it was possible to pre-
dict the stakeholders’ behaviors and attitudes,
meaning: Will they contribute as needed? Will
they take any actions against the project?
andWill they assess the projects as successful?
Unfortunately, such a prediction will of course
never be fully possible. Neither human behaviors
nor attitudes are entirely predictable, and there
is typically much we don’t know about the
stakeholders (Eskerod & Jepsen, 2013). In the
next section, we dig deeper into theories on stake-
holder behavior.
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Stakeholders 173
The Basic Tenets of Stakeholder
Behavior
As already mentioned, whether we are dealing with
a single project, a program, a project portfolio, or
the whole project-based organization, specific con-
tributions from the stakeholders are needed, regard-
less of whether the stakeholder is an individual,
a group, or an entity (Freeman, 1984; Eskerod
et al., 2015a). At the same time, the project repre-
sentatives may control resources that are attractive
and beneficial to the stakeholders, e.g. payment,
interesting challenges, potential project deliverables
the stakeholder wants, and more. As both parties are
controlling something that is of interest to the other,
it makes sense to see the relationship between the
stakeholder and the project representative as
a series of exchange processes in which both parties
give and take. The stakeholder (if we for simplicity
see this as a single or united voice) and the project
representative, e.g. the project manager, both have
a ‘power of choice’ (Barnard, 1938 [1974], p. 13)
and can therefore decide whether they want to take
part or continue to take part in the processes or not.
Stakeholders can provide, withhold or withdraw
their contributions, and thereby represent both
a threat and an opportunity (Slatter, 1980), whereas
the project representative (in the ideal world) can
decide whether or not to provide aimed-for benefits
for the stakeholder (Eskerod & Jepsen, 2013).
Classical economics theory (Smith, 2008) states
that stakeholders (as well as project representatives,
we add) will continue the exchange processes if
they perceive this to be in their self-interest.
In common parlance, they will ask: What’s in it
for me? Contributing to the project-based organiza-
tion will take place if the benefits from contributing
are perceived to be equal to or exceed the costs of
doing so, and at the same time the stakeholders (and
the project representatives) will seek to maximize
their own benefits. Examples of stakeholder benefits
are return-on-investments for investors; payment
and renewed contracts for suppliers; salary, inter-
esting tasks, and career opportunities for project
team members; and a new and better product for
the customer.
Unfortunately, project activities may also involve
disbenefits (i.e. negative side effects) that may
 174 Pernille Eskerod
discourage stakeholders from contributing to the
project-based organization. Examples are fewer
resources available for alternative “investments”;
noise from the construction site for construction
site neighbors; stress and burnouts for project team
members in an overdemanding work environment;
and environmental damages.
When stakeholders pursue their self-interests
(“What’s in it for me?”), they follow a so-called
logic of consequentiality (March & Heath, 1994).
Which is to say that “they act according to
expected consequences of contributing and
whether they believe that these consequences
will maximize their self-interests” (Eskerod &
Jepsen, 2013, p. 18). A special case of the logic
of consequentiality is the logic of appropriateness
(Cyert & March, 1992; March & Heath, 1994).
This concept implies that a stakeholder’s behavior
will be motivated by the stakeholder’s understand-
ing of What a person like me/a unit like ours would
do in a situation like this? This means that the self-
interest also concerns preserving the person/units’
social identity, and that we can expect that each
stakeholder will act in a way believed to preserve
their social identity (Rowley & Moldoveanu,
2003).
Even though the concepts logic of consequen-
tiality and logic of appropriateness may appear
to have good explanation power about forces
driving stakeholder behavior, research shows
that they cannot fully explain or predict
a stakeholder’s behavior. Newer theory on orga-
nizational behavior suggests that individuals
consider perceived fairness of treatment in their
relationships (Bosse et al., 2009). To deem
a certain treatment fair, the person or group at
hand must perceive fairness to be present on
three dimensions: (1) distribution of benefits
among the parties involved, (2) procedures, and
(3) ways of interacting. The interesting claim
(Bosse et al., 2009) is that stakeholders will
refrain from taking action to maximize their self-
interest if they perceive fairness to be present.
Instead, they will settle for benefits that are
“good enough” i.e. “satisficing” (Simon, 1956)
instead of maximizing their interests. In addition,
Bosse et al. (2009) claim that fairness will be
judged over long periods of time.
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With these pieces of inputs to understand stake-
holders, the next section discusses stakeholder man-
agement in project-based organizations.
Stakeholder Management in
Project-Based Organizations
Project stakeholder management in an organization
containing projects, programs, portfolios and/or
operations that share common resources requires
an overview of the whole landscape of stakeholders
as well as strategic choices on how to deal with each
of them, including each of the subunits of each
stakeholder if they are groups or entities like orga-
nizations. As suggested for single projects (Eskerod
& Jepsen, 2013), a viable way to do stakeholder
analysis is to use the following framework:
(1) Project stakeholder identification:
Who can affect or be affected by the organiza-
tion’s project processes or deliverables?
(2) Project stakeholder assessment:
How should each project stakeholder contri-
bute to create success?
What are the motivations of each stakeholder?
(3) Project stakeholder prioritization:
Which project stakeholders are currently most
in need of attention?
Many researchers (e.g. Ang & Killen, 2016;
Beringer et al., 2013; Blichfeldt & Eskerod, 2008)
have dealt with topics related to stakeholders in
multiproject environments. The topic of stakeholder
motivations and self-interest is also central to this
discussion, but with one additional dimension – the
fact that the ultimate goal is maximizing the value of
the overall portfolio, rather than just a single pro-
ject. Blichfeldt and Eskerod (2008) define Project
Portfolio Management (PPM) as “the managerial
activities that relate to (1) the initial screening,
selection and prioritiation of project proposals, (2)
the concurrent reprioritisation of projects in the
portfolio, and (3) the allocation and reallocation of
resources to projects according to priority” (p. 358).
In that sense, every stakeholder in a PPM situation
has an extra task – to decide how time and resources
will be distributed across the various projects. This

task is further complicated by the fact that different
stakeholder groups have different pet projects
(Beringer et al., 2013), see different value in each
project (Ang & Killen, 2016), and have different
motivation levels for each project (Blichfeldt &
Eskerod, 2008). Choosing a certain way to relate
to the project stakeholders in one project may
enhance the chances for success in this particular
project, but damage the overall portfolio value, if
the wrong project is prioritized.
Ang and Killen (2016) have studied the way
stakeholders perceive value and how it affects
PPM decision-making. Their multiple case study
approach resulted in a framework with seven
dimensions of value perception (Ang & Killen,
2016, p. 7): Singular (Transactional) value;
Generative value; Transformational value; A
Value Spectrum (Range); Retrospective-
Reflective-Future Orientated value; Value
Networks and Relationships; and Preventative
value. The authors found that only the first type
of value perception (Singular/Transactional
Value), i.e. a simplistic often short-term concept
of the direct relationship between the labor input
and the output, is recognized in real-life PPM
decision-making. In such cases, value can be
seen in return-on-investment from the specific
project, or in the manner in which the project
demonstrates its direct contribution to strategy
(Ang & Killen, 2016). In contrast, the remaining
six types of value all have a longer term and more
global outlook, looking at, for example, how
the different values from different projects may
influence later projects (generative value), or how
value can be transformational. However, as
mentioned, it is the simplistic value that is most
often recognized in PPM decision-making, and
“in practice, the findings demonstrate that portfo-
lio managers struggle with determining value for
their portfolios when project members are unable
to identify and articulate value in alignment
with organisational strategies and stakeholder
expectations upfront” (Ang & Killen, 2016,
p. 35). This leads the authors to suggesting several
questions that managers should ask, such as What
would happen/would not happen if the portfolio
did/did not include a particular project?
Of course, this also relates to the stakeholders’
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Stakeholders 175
understanding of the benefits they are aiming for
when interacting with the focal organization.
The question of the overall effect and importance
of projects in a portfolio in Ang and Killen’s (2016)
analysis corresponds to some of the issues
Blichfeldt and Eskerod (2008) and Beringer et al.
(2013) also stress. The former focus on the fact that
even companies identified as good examples of
proper PPM struggle to provide resources for all
of their concurrent projects, and one of the key
reasons is that many small projects are not consid-
ered when allocating both financial and human
resources, as only big projects are seen as part of
the portfolio (Blichfeldt & Eskerod, 2008). This is
where stakeholders’ motivation also comes in play,
as top managers attempt to prioritize the projects in
the portfolio based on various criteria, but middle
managers and project execution personnel often
reprioritize their own work, based on their percep-
tions and motivation (Blichfeldt & Eskerod, 2008).
Given the fact that smaller projects with more
immediate and visible results often are perceived
to be more fulfilling and rewarding by the people
working on them, while at the same time the big
projects are the ones given priority by a different
stakeholder group (Blichfeldt & Eskerod, 2008),
it is easy to see why some stakeholders in the
companies studied felt like resources were never
enough.
Beringer et al. (2013) had a slightly different
take on prioritizing in a PPM situation; namely,
that the stakeholder group of the senior manage-
ment tends to pay more attention to their pet pro-
jects. Similarly to Ang and Killen (2016), Beringer
et al. (2013) argue that what a particular group may
see as a very valuable project may not necessarily
be the most valuable project for the entire organi-
zation’s portfolio, and prioritizing it would be
wrong from the organization’s overall perspective.
The authors also look at other aspects of PPM,
such as stakeholder role clarity and the necessary
level of involvement of each stakeholder group
depending on the project phase to maximize
project success. They found that, alongside the
existence of pet projects, one of the biggest hurdles
to maximizing portfolio success is the lack of
stakeholder role clarity, a criteria for measuring
PPM maturity (Beringer et al., 2013). They reach
 176 Pernille Eskerod
the conclusion that: “stakeholder engagement
affects performance only in environments with
sufficiently defined roles and responsibilities. In
firms with low PPM maturity and unclear roles,
stakeholder engagement may be misguided”
(Beringer et al., 2013, p. 843). Gemünden (2015)
echoes this sentiment in an editorial on the
foundations of project management research,
highlighting that the roles of project and portfolio
managers are changing, as is the understanding
of them.
In the next section, we illustrate project
stakeholder management-related challenges in
a project-based organization by presenting a case
study conducted in a Danish company.
A Case Study
A case study was undertaken in one of the largest
industrial companies in Denmark. The company,
which is a global leader that develops and manufac-
tures mechanical and electronic products for several
industries, employs 22,000 people worldwide. The
company is divided into three business divisions
and one service division. Each business division
has its own IT department, and on top of this the
service division contains a corporate IT department
which serves business units within the various divi-
sions on a project contractual basis. Even though the
corporate IT department offers recommendations
and can be consulted on any IT question, all deci-
sions related to IT usage in the divisions are decen-
tralized, and each division is free to choose
IT systems, solutions, and providers. This makes
the corporate IT department a potential but not
mandatory internal IT provider.
Based on project contracts, the corporate
IT department accomplishes development projects
with internal customers from divisional units all
over the world. Annually, the IT department runs
about 18 large projects (defined as projects with
100+ IT person-days or classified as strategically
important). The projects deal with matters that are
either within or across divisions.
The case study involved interviews and
document studies. The key informant was
a manager of the project manager resource pool
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within the corporate IT department. The project
manager resource pool consisted of fifteen persons
who all worked full-time as project managers for the
large projects. Besides the large projects, a number
of small projects were undertaken. Both the large
and small projects drew on other employees in
addition to the project managers from the expert
pool to accomplish the projects.
In the following vignettes, the corporate
IT department’s challenges and related coping stra-
tegies are presented.
Challenge 1: No Overview of Projects
or Project Stakeholders
Even though the corporate IT department
undertook a number of projects that had many
similarities, it was not possible to benefit from
synergies across the projects, as nobody had
an overview of the IT infrastructure and the IT-
related projects within the company. Each pro-
ject was seen as a unique and isolated effort, and
no methods to collect and capture information
about either projects (ongoing, planned and
expected) or project stakeholders across the divi-
sions existed. To establish an overview, i.e. to
cope with Challenge 1, a two-person team from
the corporate IT department, i.e. the head of the
project manager resource pool and the relevant
key account manager, contacted relevant stake-
holder representatives within all the divisions
and asked them for their expectations of
demands and requests for future projects.
Informed by the feedback from all business
units within the divisions, the team made
a spreadsheet of all projects mentioned. Further,
the IT department made a rough resource
estimate on every project and an estimate for
the total IT corporate budget.
Challenge 2: Too Many Projects
After the corporate IT department had made the
total project portfolio list and the related
IT budget, it presented the results to two permanent
decision-making units within the company, i.e.
the so-called IT Corporate Committee and the
Executive Committee Plus (EC+). The former
 Stakeholders 177

consists of the vice presidents of Finance and IT in Challenge 4: Power Struggles among Heavy
the divisions, while the later consists of the com- Stakeholders
pany’s four Executive Committee members and the
The corporate IT department presented the project
presidents of the divisions. Both committees though
portfolio proposal to the EC+. However, the
that the budget and the number of projects were
committee members did not agree on the prioriti-
much too high. Even though IT-related decisions
zations suggested. Fierce discussions followed in
were decentralized, they thought that the amount of
which rational arguments to some extent were
resources spent on IT in the various divisions was
replaced by power struggles in which the ones
too high, and they couldn’t accept that the activity
who could shout the loudest or had the most
level would require the corporate IT department to
stars on their shoulders (expressions stated in
increase their capacity by hiring new employees.
interviews) would get their projects on the list.
The unanimous message from the two important
This process was very exhausting and unpleasant
stakeholders, i.e. the IT Corporate Committee and
for the participants, and many feared that the out-
the EC+, was that the company needed to find a way
comes for the company might not be good.
to reduce the number of projects in order to establish
To avoid the selected projects for the project
an overall acceptable IT budget and a suitable
portfolio being the result of enforcement by
project portfolio for the corporate IT department.
heavy stakeholders (the members of the EC+),
To reduce the number of projects, i.e. to cope
i.e. to cope with Challenge 4, it was decided
with Challenge 2, decision makers within the cor-
that a business case analysis should be carried
porate IT department produced a list of prioritized
out for each project proposal so that the
projects, based on their insights in the company’s
EC+ could base their decisions on comparisons
IT infrastructure and their understanding of where
of expected business benefits and cost-benefit
the business of the company was moving. The IT
calculations.
Corporate Committee approved the proposed
project portfolio.
Challenge 5: Tedious Calculations
Without Effect
Challenge 3: Division Presidents
Felt Left Out The various divisions tried to carry out business
case analyses for their project proposals. However,
Even though the divisions were involved in the
it was difficult and demanded a huge effort.
project prioritizations due to the vice presidents’
In many cases the analyses were not done. At the
membership in the IT Corporate Committee,
EC+ meetings the participants were not willing
a stakeholder group of major importance for
to fully base their decisions on the (inadequate)
the corporate IT department, i.e. the presidents
business case analyses. Sometimes, the following
of the divisions, felt that the divisions were not
argument could be heard: “This project is important.
sufficiently involved in the project-selection
Everybody can see that, so we have to do it!”
process. The presidents could not always under-
The business case analyses did not fully solve the
stand the decisions made; nor did they agree with
power struggle problems. Further, it was realized
all the decisions. Both managers within the
that more soft criteria for project selection were
IT corporate department and the Corporate
needed. To be able to reach selection decisions
IT Committee agreed that it would be beneficial
without the tedious work on the business case ana-
if the presidents were more involved in the
lyses and at the same time give valid and objective
decision-making process. Therefore, the com-
inputs to the selection process, i.e. to cope with
pany needed to find a way to involve the division
Challenge 5, the company needed to find a way to
presidents somewhat more. Hence, it was decided
incorporate more soft criteria in the prioritization
that the EC+ should be involved in the project-
process while not reigniting the power struggles.
selection process instead of the Corporate
As a result, the corporate IT department began to
IT Committee.

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 178 Pernille Eskerod
interact with the divisions in a different way.
Further, they presented the results differently in
their meetings with the EC+. (The search for soft
criteria will be dealt with in Challenge 7.)
Challenge 6: Inputs to Establishing
the Project Portfolios
As a new process, the head of the project manager
resource pool and an account manager started to
visit every division once a year to discuss with
them which potential projects to undertake within
the next year or eighteen months. Follow-up meet-
ings were also conducted. Some projects were
new; some were active, previous-year projects
or on-hold projects. If the sum of the demanded
budget to run all the projects was too high,
a prioritization process took place within each
division. As a result, a prioritized portfolio of
projects, including budget, within each division
was established and approved by the president of
the particular division.
After the prioritization and budget decisions
within each division were completed, the corpo-
rate IT department presented the results in a pie
chart to the EC+ to get their approval on the
summed budget. This pie chart, together with
a list of the major projects within each division,
was presented at the EC+ meetings. However,
all projects and all financial details were not
presented to the EC+ anymore. If the summed
budget, i.e. “the pie” to be shared, seemed
reasonable to EC+, it was confirmed; otherwise
the pie needed to be shrunk. If the pie needed to
be reduced, decisions on the common portfolio
were postponed so that the corporate IT depart-
ment could undertake new negotiations with each
division. Afterwards, a new EC+ meeting was
held. This process was iterated until the
EC+ accepted the budget. The various stake-
holders (EC+, division managers and employees,
and corporate IT department managers and
employees) were very satisfied with this process,
not least because they could see that their part of
the pie to a large extent resembled their part of
the earnings of the company. In other words, they
thought the distribution was fair, as well as the
processes to reach the final decision. They also
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found the individual communication processes
much more pleasant. However, the divisions
asked for help on how to select and prioritize
the projects within their project portfolio.
In order to find a way to help the single divisions
in their PPM processes, i.e. to cope with
Challenge 6, the corporate IT department began
to search for new ways to undertake project
selection and prioritizations.
Challenge 7: Making Good Use
of the Project Manager Expertise
The corporate IT department introduced a project
type categorization in order to help the divisions get
a better overview of their IT-related project needs.
The categories were: Business Development,
Business Platform, IT Platform and Maintenance,
and Merger & Acquisitions. Further, the corporate
IT department started to identify more soft selection
criteria. The criteria had to represent business dri-
vers that would enable the company to reach its
strategic goals, and it had to be possible to assess
the project proposals on business drivers scaled as
low, medium, and high. The company also estab-
lished contact with a consultancy that could help the
corporate IT department in developing and imple-
menting a decision support system and process
based on a scorecard and a project portfolio server
solution.
Another challenge identified, however, was
that some of the project managers within the
project manager expert pool were much better
in attracting competent project team members
within the corporate IT department than other
project managers. Thus, the project management
success of the other project managers was at
stake due to their less experienced project team
members. In order to enhance project manage-
ment success in the long run for all project
managers within the company, i.e. to cope with
Challenge 7, it was decided that all positions as
project team members should be announced in an
internal job announcement, and that a formal
assignment process should be established within
the corporate IT department so that all project
teams got both more experienced and less experi-
enced employees assigned to them.
 Stakeholders 179

Analysis of the Case Challenges
A common characteristic for many of the challenges
is that a struggle between the single project perspec-
tive and a different perspective can be identified.
An example from the first challenge is that each
project proposal is deemed beneficial in its own
right, but when all the proposed projects are entered
into the project portfolio list, the resource demands
become unacceptable, and it is realized that too
many projects may appear attractive when seen in
isolation. Processes to select and prioritize among
the projects are needed. However, a “global”
process, i.e. a process that deals with all project
proposals for the corporate IT department, is not
acceptable to some of the most influential stake-
holders, i.e. decision makers in the divisions,
because the risk of having only a global process is
that one division will get more projects on the
particular year’s portfolio list than the other
divisions perceive to be fair due to the divisions’
varying contributions to the company’s earnings.
The distribution of benefits in the form of getting
support from the corporate IT department must be
perceived to be fair across the divisions in order for
the division presidents and other key stakeholders to
accept a “good enough” amount of benefits from
the year’s project portfolio, in contrast to a self-
maximized amount of benefits. The new procedure,
in which each division’s project portfolio is
negotiated and approved individually and prior to
the EC+ meetings, is contributing to perceived
fairness as the division representatives feel that
their interests as stakeholders are put in the center,
instead of letting power struggles and shouting at
the EC+ meetings decide the common project port-
folio. The new procedure also helps the division
representatives to apply a logic of appropriateness
in the form of considering What would a person/an
entity like me/us do in a position like this? when
they realize that their part of the yearly budget pie to
a large extent resembles their part of the company’s
earnings.
Another example of the limitations of a project-
centric perspective is offered in Challenge 7. Here it
becomes clear that each project manager’s ability to
attract the best project team members internally
may be helpful for some of the projects but harmful
for other projects. Therefore, a perspective that sets
the individual employee in the center (asking ques-
tions like How can this employee be developed as
a project team member? or How can this employee
enhance the development of other project team
members?) is more beneficial for the company in
the long run (i.e. providing generative and transfor-
mative value).
The attempt to do business case analysis can be
seen as an example of application of a reductionist
approach. By demanding analysis with a limited
number of quantitative measures, the initiators try
to streamline the project-selection process and make
it easier to conduct. The stakeholders in the form of
committee members cannot accept this simplifica-
tion, however. They want richer pictures as the
foundation for their decision making.
The replacement of the Corporate IT Committee
with EC+ in the project-selection process shows
that each division as a stakeholder can be repre-
sented by various individuals, and that the selection
of representative for this stakeholder makes
a difference for the perceived fairness.
The analysis of the case challenges shows that it
seems reasonable, valuable, and relevant to
replace a project-centric approach with a
stakeholder-centric approach in a project-based
organization. In the next section, the two
approaches are contrasted.
Contrasting a Project-Centric
with a Stakeholder-Centric Approach
Due to its origins within Scientific Management,
project management was built on a reductionist
approach, i.e. an approach used to simplify the
description of a complex phenomenon to better be
able to grasp it (Engwall, 2003). The purpose was to
help the project manager (and other project repre-
sentatives) focus – and not get overwhelmed by the
complexity of the task at hand. A core part of the
project management reductionism was to see
a project as “nothing but” a temporary endeavor –
with activities to be planned, organized, directed,
and controlled (Engwall, 1995). As Engwall (2003)
says, “Limited attention has been paid to structures
and procedures spanning over successive projects.

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 180 Pernille Eskerod
The project as a unit of analysis has been concep-
tualized as a lonely phenomenon, with neither his-
tory nor future” (2003, p. 793). This is what we in
this chapter call “a project-centric approach.”
Engwall (2003) argues further that “. . . in order
to understand the inner life of a project in depth, it
also needs to be analyzed in relation to (1) experi-
ences from past activities; (2) politics during the
preproject phases; (3) parallel courses of events
happening during project execution; (4) ideas
about the postproject future; and (5) institutiona-
lized norms, values and routines of the project’s
organizational context” (p. 791). This implies that
the project should not be seen as a single unit of
analysis isolated from both environmental and – as
we argue – temporal (past, present, and future)
contexts.
Our claim is that contemporary stakeholder
theorizing within project management to a large
extent, and in line with the original understanding
of a project, is based on the reductionist framework,
meaning that forces underlying stakeholder beha-
vior are “nothing but” cognitive considerations
about What is in it for me/our unit? and Is it fair –
in terms of benefit distribution, procedures, and
ways of interaction? – in other words, the ‘here
and now’ of this particular project. The reason is
that the dominant unit of analysis within project
management is the individual project. Only a few
publications, like e.g. Blomquist and Packendorff
(1998) and Engwall (2003), point out that this
perspective is too narrow and that the context and
environment that the project operates in also must
be taken into account. In line with this, we believe
that a project stakeholder’s behavior cannot be
deeply understood or predicted without taking the
history, the present, and the expectations of the
future into account. Examples of new research
within project stakeholder management that takes
a broader view can be seen in Beringer et al. (2013),
who studied the behavior of internal stakeholders in
PPM and its impact on success; Davis (2014, 2016),
who focused on the difference between different
stakeholders’ perceptions of project success;
Aaltonen et al. (2015) who carried out a thorough
analysis of stakeholder dynamics at the front-end of
two nuclear waste repository projects; and Purvis
et al. (2015), who concluded that the intensity of
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stakeholder engagement (active support, token
support or counterimplementation actions) is
related to both the organizational psychological
climate and the personal psychological climate of
each stakeholder.
Fearon (1998), who has done research within
“cooperation theory,” suggests that the shadow of
the future, i.e. expectations of future interactions,
will influence the current interaction between two
parties. The phrase was coined by Axelrod (1984).
In the same line, concepts like shadow of the past
and shadow of the present add to understanding the
forces underlying a person’s behavior. Blending
the concept of the shadow of the future with the
previously mentioned perceived fairness of
treatment, Deng et al. (2013) argued that even the
perception of future fairness of treatment can
influence stakeholder involvement in project
success. Looking at the role of stakeholders in
companies undergoing acquisitions, the authors
found that acquisitions by companies with a high
corporate social responsibility are more likely to
maximize stakeholder value, as such companies
are more likely to honor implicit contracts and
offer continuity to existing stakeholders, thus
ensuring a smooth transition and keeping the
stakeholders motivated and involved to maximize
future success and ultimately benefit shareholders
(Deng et al., 2013).
In order to understand project stakeholder
motivations and behaviors in project-based orga-
nizations better, our claim is that the stakeholder
analysis needs to include analysis of the stake-
holder’s past experiences and, more importantly,
of the perceptions and interpretations of the past,
i.e. shadow of the past, as well as expectations to
the future, i.e. shadow of the future. Together
with the perception of concurrent possibilities
and threats as well as the networks the stake-
holder is involved in, i.e. shadow of the present,
these concepts add up to the concept of shadows
of the context (Eskerod & Larsen, 2016). These
authors propose that “project representatives that
take into account that stakeholders’ behavior is
influenced by the Shadows of the Context, will be
more likely to predict a stakeholder behavior
when it comes to getting needed stakeholder
contributions” (p. 10).

In order to better “hear” the stakeholders’
voices, Walker et al. (2014) propose construction
of so-called rich pictures, i.e. pictures produced
with an artistic and cultural flow of color,
diagrams, and symbols to better communicate
with the stakeholders. The concept rich picture
originates from the Soft Systems Methodology
(SSM) developed by Peter Checkland and coau-
thors (see e.g. Checkland, 1999; Checkland &
Winter, 2006) and has been used by several
researchers (e.g. Steinfort, 2010; Steinfort &
Walker, 2011; Walker & Steinfort, 2013).
Rich pictures give the project representatives
and the project stakeholders a broader basis for
communicating by bringing more information
into the conversation, not only through spoken
words but also through colors, drawings, and sym-
bols. Instead of talking about a real physical pic-
ture, the concept rich picture can also be thought of
as a symbol of having a thorough dataset (Eskerod
& Larsen, 2016). Thereby, it becomes clear that
a stakeholder analysis relying on shadows of the
context, instead of only the classical elements
in the form of logic of consequentiality and
perception of fairness, will produce a much more
complex dataset on the stakeholder’s motivations
and behaviors, i.e. a rich picture.
The risk of considering shadows of the context
and drawing rich pictures is that the project repre-
sentatives who are supposed to interact with the
stakeholder get paralyzed due to data overflow,
and thereby become worse off compared with
a situation where they use reductionist analysis
tools, such as What’s in it for me? seen in
a narrow way from the perspective of the
stakeholder.
A project-centric approach to stakeholders
relies on the recommendations from Scientific
Management in the form of gaining better focus
and overview through reductionism. In other
words, every project, and sometimes even
activity, is seen as taking place in a vacuum, and
many stakeholder analysis tools are reductionist
analytical tools. In a stakeholder-centric
approach, it makes sense to draw from concepts
like shadow of the past, shadow of the future, and
shadows of the context as proposed by Eskerod
and Larsen (2016).
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Stakeholders 181
In a project-centric approach, it is common to see
the relationship between the stakeholder and the
project as a dual relationship (originally proposed
by Rhenman, 1964). Due to the fact that each sta-
keholder may have a relationship to other stake-
holders within the organization that are stronger
than the relationship with the project, it is important
to apply a network approach instead of a dual
approach when it comes to the relationship between
the project and each stakeholder.
A classical implicit assumption within the
project-centric approach is that if sufficient
communication exists and the stakeholder
managers demonstrate enough honesty and stake-
holder empathy (Strong et al., 2001), then
stakeholder satisfaction will prevail. In a
stakeholder-centric approach, it must be realized
that power struggles among various actors (stake-
holder managers as well as stakeholders) are
inevitable. The implication is that conceptual
frameworks for stakeholder analysis and manage-
ment need to take a power dimension into con-
sideration. This is done for example by Mitchell
et al. (1997), who point to three attributes
of a stakeholder’s claim that are important to
take into consideration when strategically decid-
ing what to do. The attributes are Power,
Legitimacy, and Urgency. Another conceptual
framework, proposed by van Offenbeek and Vos
(2016), links stakeholder groups with the issues
they usually raise and measures the commonality
of issues between stakeholder groups, allowing
for a coherent analysis of issues as they emerge
in different project stages.
Based on the various inputs above, Table 12.1
provides an overview of the differences between
a project-centric and a stakeholder-centric view
when it comes to stakeholders and stakeholder
management.
Summary
In order to understand how project-based organiza-
tions can integrate multiproject management
activities to enhance strategic alignment, proper
PPM and governance, an understanding of how to
deal with the stakeholders is of utmost importance.
 182 Pernille Eskerod

Table 12.1 Contrasting a Project-Centric Approach and a Stakeholder-Centric Approach

Issue Project-Centric Approach Stakeholder-Centric Approach

Unit of analysis The project The stakeholder

Stakeholder motivations
Structure of relationship with
stakeholder
Dimensions of value perception
Method of dealing with complexity Reductionism
Consideration of context
Main advantage
Main disadvantage
Logic of consequentiality
Dual
Singular (Transactional) value
Context-free approach, i.e. no past, present Shadows of the context, i.e. shadow of
or future contexts are considered
Keeps the project representatives focused
on few parameters – and therefore doesn’t
overburden their cognitive capacity and
risk paralyzing them
Gives the project representatives a picture
that is too simple and therefore not helpful
for sufficiently predicting the stakeholder’s
coming behavior
Logic of consequentiality + perception of
fairness
Network
More dimensions of value
Rich picture
the past, shadow of the present, and
shadow of the future are considered
Provides the project representatives with
a detailed picture and is therefore helpful
for predicting the stakeholder’s coming
behavior
Challenges the project representatives’
cognitive capacity to deal with the
complexity of the forces influencing
stakeholder’s behavior – and increases
the risk of the project representatives
getting paralyzed

Project stakeholder management within an OPM
approach means interacting with stakeholders of all
project management-related activities throughout
the organization in integrated ways that build orga-
nizational effectiveness, where organizational
effectiveness is defined as stakeholders contributing
as needed by the organization, while at the same
time the stakeholders perceive they are being dealt
with in a satisfactory way.
According to organizational behavior theory,
stakeholder behavior (in terms of contributing
financial and nonfinancial resources as needed
by the project) is driven by the force “logic of
consequentiality,” meaning that the stakeholder
will contribute if he/she/the unit expects that the
consequences of contributing are positive and
that these consequences will maximize the self-
interests. According to the literature, this force
includes a subforce, “logic of appropriateness.”
This force concerns the stakeholder’s self-interest
in preserving his/her/the unit’s social identity.
The behavior will be influenced by the stake-
holder’s understanding of ”what a person/unit
like me/us would do in a situation like this.”
Therefore, the stakeholder may contribute to the
project even though the benefits on the surface
don’t equal or exceed the costs. Finally, the
stakeholder’s behavior is driven by the force
“perception of fairness,” meaning that if the
following three dimensions – (1) distribution of
benefits among the parties involved, (2) proce-
dures, and (3) ways of interacting – are perceived
to be fair by the stakeholder, then the stakeholder
will contribute financial and nonfinancial
resources to the extent that the benefits are
‘good enough’ but not necessarily ones that max-
imize the stakeholder’s interests.
Replacing the project with the stakeholder as the
main unit of analysis due to the fact that “no project
is an island” is a core message in this chapter.
The managerial implication is that stakeholder man-
agement must be based on the fact that the project is
embedded in the stakeholders’ perception of experi-
ences in the relationship with the project represen-
tatives, expectations of the future, and other
concurrent activities, relationships and networks
the stakeholder is involved in – i.e. shadows of the
context. The claim is that the shadows of the context

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add up to be a major force influencing project sta-
keholder behavior within a project-based organiza-
tion. This means that to predict stakeholder
behavior it is important to understand the stake-
holder’s perceptions of the relevant past, present,
and future. This can be done by creating rich pic-
tures of the stakeholder. The risk of considering
shadows of the context and drawing rich pictures
is that the project representatives who are supposed
to interact with the stakeholder get paralyzed due to
data overflow, and thereby become worse off com-
pared with a situation where they use reductionist
analysis tools, such as What’s in it for me/the unit?,
seen in a narrow way from the perspective of the
stakeholder. Another managerial implication is
therefore that project representatives doing stake-
holder management (and stakeholder analysis as
part of it) should be aware of the challenge of find-
ing the right balance between having a rich picture
and getting paralyzed by data overflow.
For future research, a next step for understanding
stakeholder management in an OPM approach would
be to unfold the concept stakeholder even more, rea-
lizing that a stakeholder consisting of multiple layers
cannot automatically be assumed to “speak with one
voice,” implying that achieving strategic alignment
across organizational levels can be as much
a challenge for the stakeholder as for the focal orga-
nization. This is out of the scope of this chapter,
however.
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 CHAPTER

13
Balanced Leadership
A New Perspective for Leadership in
Organizational Project Management
RALF MÜLLER, JOHANN PACKENDORFF,
and SHANKAR SANKARAN

Other research has looked at leadership that

Introduction
emerges from teams or individuals in a team and
complements the leadership of the vertical leader.
Leadership is an interpersonal, person-oriented,
Examples of this include the studies on shared lea-
social influence (Endres & Weibler, 2016), which
dership (Pearce & Conger, 2003; Crevani et al.,
guides in direction, course, action, and opinion
2007) and its related processes (e.g., Cox, Pearce,
(Bennis & Nanus, 1985). To that end, it is different
& Perry, 2003). We call this approach the horizontal
from management, which is task oriented in the
leader and his, her or their leadership style.
sense of bringing about or accomplishing some-
Most recently, researchers have started to investi-
thing, being responsible for, or conducting some-
gate the balance and situational contingency of verti-
thing (Bennis & Nanus, 1985).
cal and horizontal leadership in projects. They showed
Leadership requires a leader, but leaders do not
the particular circumstances under which vertical lea-
operate in a vacuum, nor do they need to be formal
ders in projects make way for horizontal leaders to
managers. For a long time, the terms “leader,” “lea-
temporarily partake in leading the project (e.g., Müller
dership” and “manager” were used almost inter-
et al., 2016). We call this balanced leadership, i.e.,
changeably, and only recently has there been
a situation in which the balance between vertical and
a distinction in their use (Alvesson & Sveningsson,
horizontal leadership is appropriate.
2003; Crevani et al., 2010). The development of
In this chapter, we acknowledge and integrate these
leadership research over the years has also focused
different perspectives by distinguishing between
on different aspects of leadership, ranging from an
a person’s intent and the leadership the person is
interest in the traits, characteristics, and competencies
practicing in interaction with others. Here, leader
of individual leaders, to an interest in how leadership
intent addresses the related intrapersonal processes
is practiced in social settings by leaders, co-leaders,
and activities that are carried out by the leader prior
and followers in interaction (Carroll et al., 2008).
to exercising leadership to others in practice. Practiced
Recent years have brought much insight about
leadership is the subsequent social exchange as
the importance of leadership as a complement to
defined above, thus a social exchange or interpersonal
management in projects and has added a variety of
activity between the leader and the follower(s).
perspectives to leadership. Examples include the
Combining this distinction with the perspectives of
traditional view of project and program managers
vertical and horizontal leadership identifies:
as leaders and their associated leadership styles.
This person-centric perspective has addressed the • Leader intent by the vertical and horizontal leaders
particular leadership styles of these roles (e.g., as personal internal processes, antecedent of their
Keegan & Den Hartog, 2004) as well as personal social interaction known as practiced leadership
characteristics that bring about certain leadership • Practiced leadership by the vertical and horizontal
styles (e.g., Dulewicz & Higgs, 2005). We call this leaders, as a social exchange that exercises influ-
the vertical leader and his or her leadership style. ence on one or several team members

186

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In this chapter, we address the interaction of
leader intent (both vertically and horizontally) and
practiced leadership (both vertically and horizon-
tally) in the context of balanced leadership in pro-
jects. We model this interaction in order to clarify
the different stages of balanced leadership and their
nature as being intrapersonal (leader intent) or inter-
personal (practiced leadership).
Balanced Leadership
Balanced leadership is when the vertical leader
temporarily enables and allows for horizontal lea-
dership to happen in some situations, for example,
for a team member to take the lead on a problem for
which he or she is an expert, and it is seen as
advantageous for the project. This typically happens
for a short period in a project, after which the
vertical leader assumes his or her role as leader
again. Horizontal leadership is the social process
through which one or several members of the pro-
ject team influence the project manager and the rest
of the team (and potentially other stakeholders) to
carry the project forward in a particular way.
For example, a team member may highlight a risk
that the project manager has overlooked but that
the team member became aware of. Accordingly,
we define vertical leadership as the interpersonal
process through which the project or program
manager influences the team and other stakeholders,
to carry the project forward.
There are three criteria that influence the emer-
gence of balanced leadership in projects (Müller
et al., 2016):
1. The vertical leader’s attitude toward horizontal
leadership. Some project managers, in their
role as vertical leaders, are skeptical about
the idea of surrendering authority to a team
member. Reasons include that they are
appointed as project manager because of their
superior knowledge. Granting leadership rights
to members of the team might compromise
their perceived status. Others see themselves
as “in charge” and like to have full control
over the developments in the project. Hence,
the presence of balanced leadership depends on
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Balanced Leadership 187
the vertical leader’s attitude toward horizontal
leadership.
2. The nature of the leadership situation. Empirical
studies show that those project managers who
allow for horizontal leadership often limit the
scope and authority of the horizontal leader to
merely questions of a technical nature, and only
those in areas of decision making that do not
influence the project’s objectives in terms of
time, cost, and scope. Hence, they retain the
right as sole leader in those aspects that influence
their project manager objectives and status.
3. The trust that the vertical leader has in one or
several members of the team to lead success-
fully or contribute effectively to the manage-
ment of the project. Trust is the “willingness
of a party to be vulnerable to the actions of
another party based on the expectation that the
other will perform a particular action impor-
tant to the trustor, irrespective of the ability to
monitor or control that other party” (Mayer,
Davis, & Schoorman, 1995, p. 712). Project
team members gain the trust of the project
manager through particular competences of
which the project manager becomes aware
through reputation, interaction, and monitor-
ing or earlier collaboration.
Given the restriction that horizontal leadership is
most often limited to situations requiring leadership
in technical aspects of the project, it is typically
a technical competence that makes individuals or
subteams trusted by the project manager. This trust
manifests itself in several ways. Trusted members
are often assigned additional tasks, which are typi-
cally also of a technical nature (Müller et al., 2016).
In these tasks, the trusted members can develop and
show their self-leadership capabilities (Cox et al.,
2003). The latter is required for acceptance by the
other team members and the project manager, once
a situation for their horizontal leadership arises.
That means, a team member must first learn to
lead himself or herself before being accepted by
other team members as horizontal leader (Manz,
1986). In addition, the empowerment through the
project manager indicates to the rest of the project
team the trusted status of the particular team
member. This contributes to the other team
 188 Ralf Müller, Johann Packendorff, and Shankar Sankaran
members’ shared mental model of “who can do
what” in a project. This mental model is a further
requirement for horizontal leadership to function, as
it allows for deciding when to transfer leadership
from one member to another (Burke, Fiore, & Salas,
2003).
In summary, we can say that the balance
between vertical and horizontal leadership is
enabled through the project manager by empow-
erment of one or several potential horizontal
leaders. The balance between vertical and hori-
zontal leading takes place in the cognitive space
of the project manager and team members where
the nature of the empowerment, self-management
of the empowered, and shared mental model of the
team members’ capabilities interact for the deter-
mination of the scope of this balance (Müller et al.,
2016).
Vertical Leaders and Their Leadership
Project and program managers, in their role as
vertical leaders, possess authority, which mani-
fests itself in their simultaneous management and
leadership. Contingent on the particular situa-
tion, they increase the extent of management or
leadership (Müller & Turner, 2010b). In this
chapter, we do not address the management
aspect but focus on the leadership. On the leader-
ship aspect, we address leadership intent as the
intrapersonal self-leading of leaders, which is
difficult to observe, and interpersonal practiced
leadership as a social exchange process, which is
easier to observe.
Research on vertical leaders has been done for
thousands of years. For example, Confucius in
500 BC described the four virtues of leaders as:
relationships (jen), values (xiao), process (li),
and moderation (zhang rong) (Collinson, 2000),
which reflects the intrapersonal leadership as
discussed above. Two hundred years later,
Aristotle turned the perspective from the leader
to interpersonal leadership by outlining the
process of building relationships (pathos), selling
of values (ethos) and then, and only then, persuade
with logic (logos) as the way to lead people.
And now, 2,300 years later, we find this process
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still being used in sales and other related manage-
ment training (Covey, 1992; Müller & Turner,
2010b).
More recent intrapersonal leadership literature
often describes project managers in terms of
their traits, such as an integrator with a good
understanding of technology, who is able to
make a bridge between administration and other
parts of the organization (Gaddis, 1959). Other
scholars describe them as a problem solver,
results-oriented leader, energetic, self-confident,
strategic thinker with good communication and
negotiation abilities (Turner, 2009). Yet others
portray them as thick-skinned pragmatists
(Hauschildt, Keim, & Medcof, 2000).
Another school of thought looked at the
personality of project and program managers in
an attempt to identify the impact of personality on
interpersonal leadership styles. For example,
Dulewicz and Higgs (2003) developed fifteen
dimensions of leadership competences and
clustered them under emotional (EQ), intellectual
(IQ), and managerial (MQ) leadership compe-
tences. They showed that different personality
combinations of these competences lead to
different leadership styles, and these styles fit
differently to organizational change projects of
various levels of complexity. Thus, they linked
the particular combinations of project managers
to three different leadership styles:
• Goal-oriented style, which is similar to transac-
tional style, and is most effective on low-
complexity projects. These leaders possess high
levels of IQ and medium to high levels of EQ and
MQ.
• Involving style, which is similar to the transfor-
mational style, and is most effective on
medium-complexity projects. These leaders
show high levels of EQ and medium levels of
IQ and MQ.
• Engaging style, which is best on high-complexity
projects and is often applied by managers with
high levels of EQ and MQ, and medium levels
of IQ.
A different view emerged through the investiga-
tion of the link between these leadership compe-
tences and project success (Müller & Turner, 2010b):

• Engineering and construction projects are
strongly impacted by project managers with
a sense of duty and good interpersonal commu-
nication skills. This is characteristic of project
managers who have (a) conscientiousness (an
EQ competence), that is, a clear commitment to
a course of action in the face of challenges, shown
by matching “words with deeds” and encouraging
others to support the chosen direction, and
(b) interpersonal sensitivity (another EQ compe-
tence), which is the awareness of, and accounting
for, the needs and perceptions of others in arriving
at decisions and proposing solutions to problems
and challenges. The former constitutes an intra-
personal leading characteristic and the latter an
interpersonal leadership characteristic.
• Information technology and telecom projects
require finding the right “tone” with others,
together with a project manager’s good control
over his or her own feelings and helping project
team members to take on challenging tasks. This
is characteristic of project managers who are (a)
aware of their own feelings and able to recognize
them (an EQ competence), (b) approachable and
accessible, engaging others to win their support
through communication tailored for each audi-
ence (an MQ competence), and (c) encourage
others to take on ever more demanding tasks
and roles (an MQ competence). Here, the first
is an intrapersonal leadership characteristic,
while the latter two are interpersonal leadership
characteristics.
• Business and organizational change projects
require project managers who actively create the
required dynamics for change, together with
accommodation of those involved. This is char-
acteristic of project managers who are (a)
approachable and accessible, engaging others to
win their support through communication tailored
for each audience (an MQ competence), and moti-
vated, as shown through their drive and energy to
achieve clear results and make an impact.
The former constitutes an interpersonal and the
latter an intrapersonal leadership characteristic.
Hence, leadership of projects requires vertical
leaders who possess both intrapersonal and
interpersonal leadership characteristics.
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Balanced Leadership 189
Studies on leadership styles in projects often
address transactional and transformational styles.
Here, transactional leadership emphasizes contin-
gent rewards, that is, the team members are
rewarded for meeting performance targets. These
leaders typically only get involved when tasks are
not going according to plan. On the contrary, trans-
formational leaders exhibit charisma, develop
a vision, engender pride, respect and trust, provide
inspiration, motivate by creating high expectations
and modeling of appropriate behaviors. They give
consideration to the individual, pay personal
attention to followers, and give them respect
(Bass, 1990). Hence, transactional leaders address
the lower levels and transformational leaders the
upper levels of Maslow’s (1943) hierarchy of
needs.
Keegan and den Hartog (2004) showed that pro-
ject managers on average prefer transactional over
transformational styles, which they found a bit
strange in light of the uniqueness of projects. This
would suggest that more transformational styles are
applied. Later studies looked at leadership at differ-
ent levels of project complexity and identified trans-
actional styles as prevalent in relatively simple,
often maintenance and engineering type of projects,
whereas transformational styles are preferred in
the more complex and organizational change type
of projects (Dulewicz & Higgs, 2003; Müller &
Turner, 2010b).
Summarizing the literature about the project
and program manager as vertical leader, we
see that the writers identified both intrapersonal
leader intent characteristics as well as interperso-
nal leadership characteristics practiced as
prerequisites for successful project management.
However, the literature has been largely indiffer-
ent as to the differences between the two perspec-
tives. In this chapter, we look at the way these
managers lead themselves as part of their overall
role as leaders.
Horizontal Leaders and Their
Leadership
Recent years have shown a diversity of new per-
spectives toward leadership in projects (Müller &
 190 Ralf Müller, Johann Packendorff, and Shankar Sankaran
Turner, 2005; Lindgren & Packendorff, 2009).
These views originate from recent developments
in general leadership theory, driven both by
epistemological reorientations and empirical
observations (Gronn, 2002; Cunliffe & Eriksen,
2011; Drath et al., 2008; Pearce & Conger, 2003;
Raelin, 2011; Endres & Weibler, 2016).
The traditional vertical leadership approaches as
described above are thus increasingly supplemen-
ted by approaches that also include horizontal, and
thereby collective, leadership. The point is not to
deny the existence of vertical leadership, but to
show that, in practice, leadership involves several
individuals acting simultaneously and that these
actors do not necessarily have to be formal
managers or leaders.
Horizontal and collective approaches to leader-
ship studies share the notion that leadership should
not be defined only as the actions taken by single,
vertical leaders. Instead we must be open to the
notion that leadership work involves many different
actors and that such an insight provides us with
opportunities to not only understand leadership
practice better, but also to devise more effective
ways of organizing leadership in complex, knowl-
edge-intensive settings (Crevani et al., 2010) requir-
ing, for example, organizational ambidexterity
(Havermans et al., 2015). In their extensive over-
view, Denis et al. (2012) identify four streams of
research based on such a perspective, which we
present here to also link to what it would mean in
project situations:
(1) Sharing leadership for team effectiveness, that
is, an approach focusing on members of a team
and how together they may lead each other in
pursuit of favorable outcomes (Pearce &
Conger, 2003). The basic stance is that it
could be more effective to involve several
team members in the management of the pro-
ject, usually in situations characterized by high
task interdependence and complexity. In such
situations, a single vertical leader might not
possess all the expertise and control needed,
but will play an important role in fostering
effective shared-leadership behaviors.
(2) Pooling leadership at the top to lead others.
This approach is mainly concerned with top
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management echelons in organizations,
emphasizing the positive effects of joint
organizational leadership in terms of role spe-
cialization, complementarity, and legitimacy
(Gronn, 2002; Denis et al., 2001).
Organizations within culture, media, higher
education, health care, and software develop-
ment often tend to make use of such leadership
practices. If we consider a project to be
a temporary organization, this approach
would mean that dyadic or triadic project man-
agement constellations could be favorable in
some circumstances; for example, in projects
operating across different technologies, indus-
tries, or institutional logics.
(3) Spreading leadership across levels of time.
This approach is concerned with processes
where different individuals are involved in
leading the project at different stages or epi-
sodes (Huxham & Vangen, 2000). In project
settings, this could be relevant; for example, in
large infrastructure projects – which often go
through several, quite distinct stages with dif-
ferent actors and stakeholders involved in the
journey from idea to completion – where
relaying leadership between different leaders
could work better than having the same verti-
cal leader running the entire process.
(4) Producing leadership through interactions.
This approach disassociates leadership
from distinct individuals, instead studying
how leadership work is unfolding and prac-
ticed – thus locating leadership as something
that emerges in interactions between team
members rather than being exercised by
these members. In a relational leadership
view from an organizational perspective
(Uhl-Bien, 2006, p. 655), leadership is not
viewed as a hierarchical position but
“as a process of relational dynamics
throughout the organization.” Such a rela-
tional view in projects would be concerned
with how well interactions in a project team
unfold; that is, to what extent issues, identi-
ties, time frames, and spaces of action
are thoroughly processed and understood in
the team (Lindgren & Packendorff, 2011;
Packendorff et al., 2014).

These streams of research are all of quite recent
origin, but they have still resulted in a number of
central concepts and perspectives in leadership
research that are important to include in our analysis
of balanced project leadership. We name a few
exemplary perspectives.
Shared Leadership
Shared leadership, or its related concept of
distributed leadership, is closely linked to
horizontal leadership, and complementary to verti-
cal leadership in balanced leadership. This leader-
ship emerges in projects when the situation requires
temporary and dedicated leadership by a
specialist(s) in the project team (Pearce & Sims,
2000). Cox, Pearce, and Perry (2003) describe it as
a collaborative, emergent process of group interac-
tion. In this process, team members engage in peer
leadership during collaboration (Crevani et al.,
2007). It implies that team members have signifi-
cant authority to chart the team’s path forward; thus
it requires empowerment granted by the vertical
leader and self-management from those team mem-
bers exercising shared leadership.
Authentic Leadership
This addresses the intrapersonal or felt experience
of the followers, with the intrapersonal character-
istics of the leader. For example, when a leader is
perceived to possess strong positive values, leads
from the heart, sets highest levels of ethics and
morality, and goes beyond his or her personal
interests for the well-being of the followers,
then he or she is often seen as authentic. Their
leadership style is based on trust and motivated
by the well-being of their followers. Through their
intrapersonal leading they build an environment of
mutual trust, optimism, and altruism, which is
then reflected through interpersonal leadership
based on trust, transparency, and openness.
(Toor & Ofori, 2008).
Aesthetic Leadership
This addresses the holistic felt experience of the
follower and takes into account the influence of
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Balanced Leadership 191
a leader together with a wide range of nonhuman
aspects. It includes spaces, places, and other
influences perceived through the senses. Hence,
it perceives leadership to happen sociomaterially
by adding symbols, memories, feelings, physical
qualities of places, as well other situational
influences into a perceived leadership by the
follower (Hansen, Ropo, & Sauer, 2007). This
perspective of leadership goes beyond the scope
of the present chapter and is addressed, among
others, in the current research on the impact of
physical space on leadership styles (e.g., Paoli,
Vaagaasar, & Müller, 2013).
Distributed Leadership
While this concept is used differently in different
contexts and subfields (Bolden, 2011; Cope et al.,
2011), it has a common denominator in the view of
leadership as a collective phenomenon, which is by
default distributed to the actors involved, rather than
an individual phenomenon emanating from a single
vertical manager (Gronn, 2002). Applied to project
leadership inquiry, it means that project leadership
could be studied as activities emerging in the social
interaction in and around the project team, while
acknowledging the leadership work done also by
other team members and opening up empirical
inquiries for a multitude of potentially differing
views of the same processes. In these inquiries,
leadership should be studied in terms of practices;
that is, the everyday activities that constitute project
leadership (Cicmil et al., 2006; Blomquist et al.,
2010), with a focus on interaction processes as
such, rather than on the formal organizational in
which unit they unfold (Lindgren & Packendorff,
2009).
When refocusing from individual leaders to
leadership processes, we are able to discern far
wider social interactions in which project leadership
is constructed. In the studies conducted by Lindgren
and Packendorff (2011) and Packendorff et al.
(2014), it appeared that several individuals, both
inside and outside the companies, involved
themselves in the ongoing construction of project
direction. Instead of viewing, for example, changed
technical priorities, agreements with inspection
 192 Ralf Müller, Johann Packendorff, and Shankar Sankaran
authorities or the division of duties at laboratories
as formal decisions made by the project leader,
far more complex interactions leading up to these
decisions could be acknowledged in terms of
leadership. When going beyond the formally
defined project as the unit of analysis, it could be
observed that project leadership activities also
involved actors that would elsewhere have been
seen as more or less external stakeholders or part
of the governance structure. Projects – or any other
formal organizational unit for that matter – are
important to actors in the sense that they are
boundary constructs that contribute to a desired
sense of order and clarity (Lundin & Söderholm,
1995). This means that while it is important to
understand that formally defined organizational
boundaries are constantly co-constructed by
actors, empirical fieldwork and analysis on, for
example, leadership or organizing processes
should not be confined to these boundaries alone.
Again, the formally designated project leader may
be a part of leadership work “external” to the
project, just as “external” actors may be a part of
project leadership activities.
In a quantitative study of team effectiveness,
Mehra et al. (2006) investigated the effects of
distributed versus vertical leadership and also the
effects of coordination within a network of hori-
zontal leaders. They concluded that distributed
leadership forms could not be associated with
higher performance per se, as the optimal balance
between vertical and distributed leadership was
different from situation to situation. Within the
category distributed leadership configurations,
however, it was clear that coordinated networks
of horizontal leaders yielded better performances
than fragmented networks – thereby also high-
lighting an important role for vertical leaders
in situations characterized by a high degree of
horizontal leadership.
Relational Leadership
Relational leadership (Fletcher, 2004; Uhl-Bien,
2006; Cunliffe & Eriksen, 2011; Endres &
Weibler, 2016) is closely connected to the notion
of leadership as essentially a distributed
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phenomenon, emerging in interactions between
people. It is usually described in contrast to “entita-
tive” perspectives, in which the focus of interest is
placed on the individuals interacting. Central issues
studied in this tradition are social interactions,
usually from a social constructionist viewpoint.
Examples include the exploration of how relational
practices in organizations are developed and how
ethical and respectful ways of relating can be har-
nessed (Crevani, 2015).
Although the literature concerned with different
aspects of horizontal leadership is not as well
established and empirically well researched as that
on vertical leadership, we can still make some
concluding remarks on the issues of leader intent
and practiced leadership. First, it is important to
acknowledge that leader intent is not formed in
a vacuum; it is formed in interaction with others
and involves both traditional expectations on
vertical leadership as well as expectations on
responsible “coworkership” and the exercise of
technical seniority/superiority. Second, practiced
horizontal leadership will, from time to time,
involve different sets of people depending on the
situation at hand – for example, through different
successive leadership configurations or through
relaying leadership (Denis et al., 2012). Third,
what are processed in the continuous construction
of leader intent and practiced leadership are not only
formal decisions on project planning, control and
deliveries, but also organizational complexities,
technical issues, and identities (Lindgren &
Packendorff, 2011). The next section shows
how the interaction of leader intent and practiced
leadership can be modeled as a process.
Modeling the Interaction of Leader Intent
and Practiced Leadership in Leadership
Figure 13.1 shows a sequential process model that
starts in quadrant 1 in the lower left with the
qualification of possible candidates for horizontal
leadership and the subsequent selection of
a candidate when the need for horizontal leadership
arises. Both activities are internal decisions by the
two leaders. The potential horizontal leaders qualify
themselves, for example, through reputation and/or
superior performance or otherwise and make an
 Balanced Leadership 193

(2) Enabling: (3) Exercising horizontal

Practiced leadership
leadership:
VL: Empowering the vertical
leader VL: Shifting leadership to HL

HL: Developing self HL: Executing leadership.

Vertical leader (VL)

management Showing self-management

(1) Qualification and (4) Monitoring and control:

selection:
Leader intent

VL: Monitoring and

VL: Selection of horizontal controlling the HL
leader

HL: Monitoring and

HL: Developing self-efficacy controlling the team
capabilities

Leader intent Practiced leadership

Horizontal leaders (HL)

Figure 13.1. Leading and leadership, vertically and horizontally.

intrapersonal decisions, often based on their self- the new horizontal leader, once he or she starts to
efficacy, to accept or decline the offer to lead when exercise leadership.
selected by the vertical leader. The intrapersonal Quadrant 3 in the upper right addresses the next
decision by the vertical leader to select one or step, that is, the leadership of both horizontal and
a particular group as horizontal leader(s) is similarly vertical leaders. Here the vertical leader’s hand-
made. over of leadership authority and the associated
The empowerment of the horizontal leader(s) to acceptance of it by horizontal leaders becomes
their temporary role marks a social activity by the visible to the team (and potentially other stake-
vertical leader and is addressed in quadrant 2 in the holders). The horizontal leader(s) take(s) on the
upper left of Figure 13.1. The vertical leader devised role and exercise(s) their leadership. Now
appoints (or grants the authority to) one or several the leadership styles of the vertical and horizontal
horizontal leader(s). This activity is visible to the leaders need to be synchronized in front of the
rest of the team and constitutes an interpersonal other members of the team and other stakeholders,
leadership activity on the part of the vertical leader. and clashes need to be avoided.
The person(s) empowered now has the chance to Once the horizontal leaders have taken over,
develop his or her self-management capabilities, the vertical leader’s monitoring and control of the
and thus need to develop internally to the extent horizontal leaders sets in, as shown in quadrant 4,
that the other team members will trust and accept lower right. This is an internal leading activity by

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 194 Ralf Müller, Johann Packendorff, and Shankar Sankaran
the vertical leader and continues until the horizontal
leaders finish their temporary role and the leader-
ship authority goes back to the vertical leader. Then
the circle repeats itself for the next occasion of
balanced leadership.
In the following section, we discuss the model in
more detail.
Quadrant 1: Qualification and Selection
In the above section we described the project
manager’s decision to trust individual team
members to lead the project or parts of it tempora-
rily, and we noted a few criteria for trust (such as
extraordinary skills, or good experiences in prior
collaborations). The decision to trust (and subse-
quently empower the trustee) is made personally
by the project manager and is therefore an intraper-
sonal decision of the vertical leader. Empirical
evidence shows that trust is not absolute and,
depending on the level of trust, the vertical leader
may choose different levels of acceptance of
horizontal leadership. This can include blind accep-
tance of what the horizontal leader does; verifica-
tion of the horizontal leader’s actions by third
parties, such as validation by another team mem-
ber(s) or outside parties; review of the horizontal
leader’s actions by the project manager together
with his or her supervisor; giving time for the hor-
izontal leader to prove the viability of his or
her actions; or denial by the project manager
(Müller et al., 2016).
A precondition for being selected by the vertical
leader is the potential horizontal leader’s intraper-
sonal decision (i.e. leader intent) to put himself or
herself up to a possible leadership position.
The potential horizontal leader’s positive decision
supports his or her motivation for extraordinary
performance, which needs to be visible to the
vertical leader, as a potential candidate for hori-
zontal leadership. This decision can be supported
or hindered through a number of factors. Ample
evidence exists that individuals often gradually
take on more and more horizontal leadership
roles until they can be considered a professional
project manager, a phenomenon known as the
accidental project manager (e.g., PMI, 2016).
It describes the gradual role change from technical
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expert to leading technical expert, who, with
increasing frequency, gets granted horizontal lea-
dership authority until he or she is considered a
project manager and becomes formally appointed
to a vertical leadership role. Another condition
for a positive decision to become a horizontal
leader is the person’s belief that he or she has
the abilities to successfully complete the task of
horizontal leadership. This is known as self-
efficacy and is described by Bandura (1977,
1982). Here, the individual’s capacity to antici-
pate future consequences of his or her actions
provides a cognitively based source of motivation
for a certain type of behavior. Self-efficacy
comes to bear in the subsequent intrapersonal
decision whether one can successfully execute
the behavior that leads to desired outcomes.
A person’s strength in the conviction that he or
she can be effective in their activity affects
“whether they will even try to cope with given
situations” (Bandura, 1977, p. 193). This positions
self-efficacy as a major aspect for prospective
horizontal leaders in their decision whether or
not to accept such a role.
The literature on leadership has a long tradition
in addressing this aspect. The ability to build self-
efficacy in others is often described as a character-
istic of successful (vertical) leaders and is
measured as part of assessment models, such as
vertical leaders’ competences in empowerment
and development as described by Dulewicz and
Higgs (2003) in their cluster of MQ competence.
Here, empowerment is described as giving staff
autonomy to take on personally challenging tasks.
It is often exhibited by encouraging others to solve
problems, and develop their own ideas and vision.
Development is the vertical manager’s belief that
others have the potential to take on ever more
demanding tasks and roles. These managers then
coach and support people in the development of
their competences, so that they can contribute
effectively and develop themselves (Dulewicz &
Higgs, 2005).
In summary, quadrant 1 describes qualification
and selection as the preconditions for horizontal
leadership to emerge. These are intrapersonal (lead-
ing) activities and decisions by both vertical and
horizontal leaders.
 Balanced Leadership 195

Quadrant 2: Enabling Horizontal Leadership
Quadrant 2 comprises the vertical manager’s inter-
personal leadership activity of enabling horizontal
leadership and announcing (or at least indicating)
the potential horizontal leader. At the same time, it
is the interpersonal leading of the horizontal leader
toward a level of self-management that qualifies
him or her for this role in the eyes of the other
team members.
The way the vertical manager enables a horizon-
tal leader to take over is a question of leadership
style. Styles are known to be contingent on
a number of factors, such as the personality of
the vertical leader (as described above using the
example of Dulewicz and Higgs, 2003), project
type (Müller & Turner, 2010a), project complexity
(Turner & Müller, 2006; Cavaleri & Reed, 2008),
status of the project (e.g., Turner & Müller, 2004),
and national culture within which the project is
executed (e.g., Müller & Turner, 2004), to name
a few. Developing a theory on the combination of
all these factors would go beyond the scope of this
chapter. However, we would like to point out the
need for a careful evaluation of the situation by the
vertical leader before enabling or announcing
a horizontal leader, as there might be rivalry for
the role and the resulting tension might negatively
impact team performance.
For the horizontal leadership candidate, the intra-
personal self-leading toward a level that convinces
others that they want to be led by the candidate
marks this stage of the process. Self-leading is the
process through which people influence themselves
to achieve the self-direction and self-motivation
needed to perform (Manz, 1986). Houghton, Neck,
and Manz (2003) describe it as being at the heart of
shared leadership and carried out by individuals
through devising strategies to influence and moti-
vate themselves. The authors describe three cate-
gories of strategies:
• Behavior-focused strategies try to increase self-
awareness for behavior needed to accomplish
certain tasks. This is often done through self-
observation, self-goal setting, self-reward,
self-correcting feedback, and practicing.
• Natural (or intrinsic) reward strategies focus on
the positive aspects of a task or its inherently
rewarding aspects. This is often done by shifting
the focus to the pleasant aspects of work.
• Constructive thought strategies influence and con-
trol the cognitive thought processes to facilitate the
formation of constructive thought patterns or
habits of thinking in order to impact positively on
one’s performance. This is often done through self-
analysis and improvement of belief systems (i.e.,
identify, confront and replace dysfunctional beliefs
and assumptions), mental imagery of successful
performance outcomes, and positive self-talk
(e.g., replacing discouraging self-talk with
encouraging optimistic self-dialogs).
The three categories of self-leadership interact
with self-efficacy and contribute to the enhance-
ment of self-efficacy perceptions, which should
lead to higher performance.
When the horizontal leadership candidate reacts
positively to the offer of leadership by the vertical
leader, the next step in the process is reached.
Quadrant 3: Exercising Horizontal
Leadership
At this stage of the process, vertical leadership is
reduced and horizontal leadership increased.
Here, the vertical leader steps out of the limelight
without surrendering the responsibility and
accountability for appropriate leadership – project
managers’ responsibilities are part of established
project governance structures and can be dele-
gated but never transferred. Vertical leadership is
still there, just not performed in the forefront.
At the same time, horizontal leadership steps into
the limelight and leads in synchronization with
vertical leadership.
The vertical leader reduces his or her own visible
leadership, but is still involved in making sure that
the project develops in the desired way. For this, the
vertical leader facilitates the process of balancing
vertical and horizontal leadership, monitors the
horizontal leader(s), and ensures the presence of
the leadership style(s) required for the project in
its current state. This may include traditional styles
such as directive, transactional, or transformational
(Houghton et al., 2003), or more contemporary
styles such as visionary, coaching, affiliative, demo-
cratic, pace-setting, or commanding (Goleman,

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 196 Ralf Müller, Johann Packendorff, and Shankar Sankaran
Boyatzis, & McKee, 2002). Especially when
appointing less experienced horizontal leaders it
becomes important to provide the required support
to allow the candidates to be successful.
The horizontal leader(s) accept the power, step(s)
into the limelight, and attempt to exercise the lea-
dership positions they are appointed to. This is the
time horizontal leaders are most influential and
visible. The experiences gained during this period
shape the self-efficacy beliefs and attitudes that
impact on future decisions about accepting
additional horizontal leadership opportunities, or
even foster the desire to move into a management
role in the future. As discussed above, the repeated
appointment to a temporary leadership role in
projects often paves the way for team members to
become formally appointed as project manager in
the future.
Quadrant 4: Monitoring and Control
This step is interwoven with step 3 in that it is the
monitoring and control of the leadership exercised
at step 3. For the vertical leader, this includes
the intrapersonal leading activity of determining
the scope, style, and duration of horizontal
leadership. For the horizontal leader, it includes
the implementation of monitoring and control as
part of the interpersonal leadership he or she
executes.
At this stage, the vertical leader leads himself or
herself through a number of intrapersonal deci-
sions. These include: the amount of power to be
granted to horizontal leaders and entire team, the
frequency and extent of monitoring of the hori-
zontal leader’s activities, the ways of giving feed-
back, possible corrective actions, and the duration
of the horizontal leadership. The amount of power
refers to the degree the vertical leader steps back
and leaves the field to the horizontal leader.
Stepping back too much may be perceived by
some vertical leaders as a sign of weakness or
even a career-limiting move. This needs to be
balanced by the minimum level of power that is
needed for the horizontal leader to be motivated to
take on the task and be accepted by the team. Too
little power reduces confidence and the desire to
engage in horizontal leadership (Houghton et al.,
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2003). The monitoring and control must be in line
with the level of power and the leadership style
used. Claiming a high level of trust and then
controlling on an hourly basis does not motivate
or encourage the horizontal leader, especially not
when done in front of the team. Feedback and
possible corrective actions must also be adjusted
in light of the power that is granted to the hori-
zontal leader, possibly in one-on-one talks rather
than team meetings. Finally, the vertical leader
must agree with the horizontal leader when to
hand back the leadership to the vertical leader or
transfer it to another horizontal leader.
The horizontal leader’s role at this stage is to
implement a monitoring and control system as part
of his or her leadership style. Do people follow him
or her? Do they respect the horizontal leader? Is he
or she really “in charge”, or is the vertical leader (or
someone else) actually leading the project? These
types of questions must be addressed as part of the
interpersonal leadership by the horizontal leader.
An important aspect for this is the level of transpar-
ency in the project. The interaction between the two
leadership roles (i.e., balanced leadership) should
be visible and understandable by the team members,
so that they view the temporary transfer of leader-
ship as a legitimate and transparent move. This
includes transparency in possible changes in leader-
ship styles, monitoring and control approaches
(such as a switch from outcome to behavior control
[Ouchi, 1980]), success factors, possible escalation
procedures in case of problems with the temporary
leader, and so forth. Finally, transparency in the
distribution of power and authority between the
two leadership roles is a necessity for coordinated
and predictable leadership during the time the hor-
izontal leader is in charge.
The above process shows the interaction of
intrapersonal and interpersonal aspects of balanced
leadership. It portrays balanced leadership as a four-
step process, where each step comprises different,
albeit synchronized, activities of the horizontal and
vertical leaders. To that end, we addressed some of
the limitations in the existing literature, which often
only takes either an intra- or an interpersonal per-
spective, and showed the need for further studies to
understand and theorize on the activities that go on
in each of the four steps.

The process outlined here provides important
insights for practitioners, such as the need for timely
synchronization of the activities in each of the four
steps, and the anticipation of the needs and activities
of the subsequent step when executing balanced
leadership. Moreover, it introduced the concept of
balanced leadership, which is relatively new to the
world of project management, but applicable
at many layers in the organizational project
management hierarchy or network. What has been
described from the perspective of project manager
as vertical leader and team member as horizontal
leader is proposed as equally applicable for the
program manager as vertical leader and the related
project managers as horizontal leaders, or the port-
folio manager and the respective program and pro-
ject managers. To that end, we provided a new
perspective to leadership in organizational project
management, which will increase in importance due
to the increasing specialization and diversity in
projects.
We conclude that the process and systemic
perspective of this chapter provides for a new and
deeper understanding of the intra- and interpersonal
dynamics in balanced leadership: it is a first step
toward a more holistic understanding of balanced
leadership in projects. This contributes to the
development of more realistic leadership theories,
which provide for more deliberate and successful
leadership approaches.
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 CHAPTER
14
Project Teams and Their Role in
Organizational Project Management
NATHALIE DROUIN and SHANKAR SANKARAN
Introduction
Amy Edmondson, who is a prominent management
researcher on teams, states that organizations are
increasingly using teams to get more complex
work done, deliver better organizational perfor-
mance, and create a more engaging and satisfying
work environment. Projects also rely on effective
teamwork to deliver results. However, research in
projects has been mostly focused on studying teams
within a project and on differentiating team devel-
opment in projects from their development in func-
tional teams or “permanent organizations.”
In this chapter, we look at teams from both
a project perspective and a wider perspective by
viewing their role in organizational project manage-
ment and whether the relationship between project
teams and functional teams needs to be reconsid-
ered from an integration perspective. We touch
upon the notion of cross-functional teams, which
may become a necessity when you plan to integrate
portfolio, program and/or project management
teams with functional teams in an organization to
deliver successful projects aligned to their strategy.
We also present an analysis based on interviews
with five experienced project managers on inte-
grated teams, cross-functional teams, and how
teams have evolved over a period of three decades
from colocated teams to virtual, intergenerational
and multicultural teams. We conclude with some
ideas for further research into project teams from an
OPM point of view.
Aim of the Chapter
The purpose of this chapter is therefore to under-
stand the relationship between OPM and project
teams through the lens of OPM and an illustrative
200
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case study on the changes or evolution in the man-
agement of project teams.
The chapter is structured as follows. First, we
define what we understand by a “team,” and then
expand our discussion on project teams and their
key characteristics; second, we outline the
relationships between OPM and project teams;
third, we present the results from an analysis of
interviews with five experienced project managers
from different sectors; fourth, we compare the
results from the interviews with the literature;
and finally, we conclude with some ideas on
further research that can be conducted from an
OPM perspective on teams.
What Is a Team?
Teams have existed for hundreds of years and have
been the subject of countless books. The benefits
teams offer to organizational effectiveness have
been well recognized (Katzenbach & Smith,
1993). More specifically, there is over fifty years
of psychological research – literally thousands of
studies – focused on understanding and influencing
the processes that underlie team effectiveness
(Kozlowski & Ilgen, 2006, p. 77). Several taxo-
nomies of team types have been discussed in the
literature (e.g., Cohen & Bailey, 1997; Devine,
2002; Hackman, 1990), for instance, teams who
recommended things, teams who make or do things,
and teams who run or manage things (Katzenbach &
Smith, 1993). They could be projects teams, execu-
tive teams, cross-functional teams, and dispersed or
virtual teams. Teams could consist of homogeneous
or heterogeneous members (Mathieu, Maynard,
Rapp, & Gilson, 2008). Teams are recognized as
organizational units dedicated to organizational
performance and are one of the most commonly

used means for achieving organizational integration
(Child, 2005).
But, what is a team? A few definitions of teams
found in the literature are discussed next. From
a systems point of view, teams are “complex
dynamic systems that exist in a context, develop as
members interact over time, and evolve and adapt as
situational demands unfold” (Kozlowski & Ilgen,
2006, p. 78). From a role and responsibility point of
view, they “are two or more individuals who
socially interact (face-to-face or virtually); possess
one or more common goals; are brought together to
perform organizationally relevant tasks; exhibit
interdependencies with respect to workflow, goals,
and outcomes; have different roles and responsibil-
ities; and are embedded together in an encompass-
ing organizational system, with boundaries and
linkages to the broader system context and task
environment” (Kozlowski & Ilgen, 2006, p. 79)
(see also: Alderfer, 1977; Argote & McGrath,
1993; Hackman, 1992; Hollenbeck et al., 1995;
Kozlowski, Gully, McHugh, Salas, & Cannon-
Bowers, 1996; Kozlowski et al., 1999; Salas,
Dickinson, Converse, & Tannenbaum, 1992).
Looking further into the relationship between
teams and the organization, organizational teams
are “collectives who exist to perform organization-
ally relevant tasks, share one or more common
goals, interact socially, exhibit task interdependen-
cies, maintain and manage boundaries, and are
embedded in an organizational context that sets
boundaries, constrains the team, and influences
exchanges with other units in the broader entity”
(Kozlowski & Bell, 2008, p. 334). A more recent
definition also takes up a system view by defining
teams as:
complex open systems forming entities character-
ized by two or more individuals who exist to
perform organizationally relevant tasks, who
interact socially, dynamically, recursively, adap-
tively, and often virtually; who have shared or
common valued goals; who hold meaningful and
high levels of task, feedback and goal interdepen-
dencies; who are often hierarchically structured;
whose group has a limited life span; whose exper-
tise, roles and responsibilities are distributed and
who are bounded by and embedded within an
organizational/environmental context that sets
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Project Teams and Their Role in OPM 201
top-down constraints and that influences and is
influenced by bottom-up phenomena occurring
over time and enacted by competencies and
processes, emergent cognitive and affective
states, performance outcomes, exchanges with
other teams, and stakeholder judgments of team
member and team effectiveness. (Chiocchio,
Kelloway, & Hobbs, 2015, p. 42)
From these definitions, one can conclude that
teams operate in an organizational context that,
in turn, influences their functioning; they have
some levels of interdependencies (Mathieu et al.,
2008); and they are complex dynamic systems
with shared common goals with the team
members interacting socially and often virtually
(Bourgault & Drouin, 2009). Indeed, the increas-
ing and constant evolution of technology has
facilitated teams to be distributed across time and
space (Bourgault et al., 2009; Powell, Piccoli, &
Ives, 2004). Multicultural teams or diversity
among team members are becoming common as
teams are being linked around the globe by tech-
nology. Teams are also embedded in multilevel
(individual, team, and organizational) systems
(Kozlowski & Ilgen, 2006). This broad environmen-
tal context influences team efficacy or effectiveness.
Team efficacy can be defined as a shared belief in the
team’s collective capability to organize and execute
courses of action required to produce expected levels
of goal attainment (Bandura, 1994, 1997). Over forty
years of research has conceptualized team effective-
ness based on the logic of an input–process–output
(I-P-O) heuristic, formulated by McGrath (1964).
Inputs, here, refer to the composition of the team in
terms of the constellation of individual characteris-
tics and resources at multiple levels (individual,
team, organization). Processes refer to activities
that team members engage in, combining their
resources to cope with task demands. They mediate
the translation of inputs to outputs. Output has three
facets: (a) judging performance by relevant others
external to the team; (b) meeting of team-member
needs; and (c) viability, or the willingness of mem-
bers to remain in the team. Kozlowski and Ilgen
(2006) adopt a more contemporary perspective of
team effectiveness by conceptualizing the team as
embedded in a multilevel system that has indivi-
dual-, team-, and organizational-level aspects;
 202 Nathalie Drouin and Shankar Sankaran
focusing centrally on task-relevant processes;
incorporating temporal dynamics encompassing
episodic tasks and developmental progression;
and viewing team processes and effectiveness as
emergent phenomena unfolding in a proximal task
or social context that teams in part enact, while also
being embedded in a larger organization system or
environmental context.
Earlier in this section, we used several definitions
of teams to pinpoint some key features (multilevel
systems, diversity, virtuality, etc.). However, we
only cover the tip of the iceberg to show the com-
plexity in managing organizational teams. Working
together in pursuing a common goal across multiple
divisions in rapidly changing environments with
dense interdependencies, organizations, teams are
facing dizzying challenges. We will now conclude
our discussion on teams in general, and move on to
discuss project teams. For a deeper understanding of
team-related topics such as team effectiveness, we
invite the readers to look up the following refer-
ences: Belbin (2012); Kozlowski and Bell (2008);
Kozlowski and Ilgen (2006); Mathieu et al. (2008);
Mathieu and Schulze (2006); McGrath (1964,
1991); Tesluk and Mathieu (1999).
What is a Project Team?
In the previous section, we pointed out that several
taxonomies of teams exist and a project team is
one type among these (Cohen & Bailey, 1997).
But, what is a project team? Are there distinguish-
able features that differentiate project teams from
other teams? According to PMI (2004) “the
project team is composed of the people who have
assigned roles and responsibilities for completing
the project and is composed of the project
manager, the project management team and for
some projects, the project sponsor” (p.199). Lawler
III (1996), takes a product–consumer–service
perspective by defining project teams as “teams
typically formed to manufacture a particular
product, develop new products, redesign existing
ones, or deliver a service that has a known limited
life expectancy. Team members can be on several
project teams at once” (pp. 137–138). Englund and
Graham (1997) discuss the nature and life of project
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teams by explaining that they are made up of a “core
project team that is composed of representatives for
each department involved in developing and imple-
menting the new product or application: they stay
on the project from beginning to end to direct the
work of the people in the departments” (pp. 92–93),
while Devine et al. (1999) include an external aspect
by stating that they are ongoing project teams that
are “standing teams with relatively stable member-
ship that solve problems, make plans or decisions,
or interact with clients or customers” (pp. 683–684).
After analyzing the definitions of teams and project
teams, Chiocchio et al. (2015) propose the follow-
ing definition:
A project team unites people with varied knowl-
edge, expertise and experience who, within the life
span of the project but over long work cycles, must
acquire and pool large amounts of information in
order to define or clarify their purpose, adapt or
create the means to progressively elaborate an
incrementally or radically new concept, service,
product, activity, or more generally, to generate
change. (p. 54)
For a good review of project team definitions see
Chiocchio et al. (2015).
Three distinguishing features emerge from these
definitions. First, the notion of a core team that
implies that some team members carry out the pro-
ject from the beginning to end, either face-to-face or
virtually. Team members stick together for the
whole duration of the project and are responsible
for the execution and completion of the project
phases – initiation, planning, execution, and termi-
nation (PMI, 2008). Second, the notion of integra-
tion or integrative role that refers to bringing
additional, more specialized individuals or teams
at various project phases to fill knowledge gaps
(Hoegl, Weinkauf, & Gemuenden, 2004). This
implies that the core project teams have an integra-
tive role as they manage the project with additional
teams from time to time (Clark & Wheelwright,
1992). Chiocchio et al. (2015) coined the term com-
ponent project team to refer to people or teams who
contribute to the project for specialized tasks
at specific times. Third, the notion of multiteam
systems, as depicted by Connaughton, Williams,
Shuffler, Zaccaro, Marks, and DeChurch (2011),

referring to the fact that teams are also embedded in
large, complex, dynamic organizational systems,
and teams operate autonomously as well as in coor-
dination with other teams within an organizational
context to carry out their tasks.
Projects can be carried out by single or multiple
teams. Project success is dependent on achieving
set project goals. The organization can help
in achieving these goals by empowering the
project teams with needed decision-making,
assigning appropriate resources, and by creating
a productive climate. This will also contribute
to a team’s success. Specific team behaviors lead-
ing to project- as well as team success include:
cooperation, commitment to project, project
ownership, and trust between team members
(McDonough, 2000). Team leadership (Turner
& Müller, 2005) and organizational support to
teams (Drouin & Bourgault, 2013) are also men-
tioned as important enablers of project success.
As project teams are getting more dispersed, it is
also necessary to consider the role of virtual teams
in project success. For virtual project teams, key
success factors could be summarized as follows.
It is important to select, develop, and retain man-
agers with managerial skills to build effective and
efficient virtual teams (Gilley et al., 2010).
The literature on virtual teams pays specific atten-
tion to social dimensions or team building and
social cohesion (Lin et al., 2015). Research shows
that a virtual team’s potential success factors and
organizational support perceived by the team are
positively correlated and influence each other
(Drouin & Bourgault, 2013; and Shelton et al.,
2010), and that increasing the power of a team and
organizational support can increase productivity
(Shelton et al., 2010). The importance of structural
and relational factors in virtual work ensures the
adaptation of members to the virtual workplace.
The project manager must pay particular attention
to matters concerning the type of work interdepen-
dencies between virtual workers, how individuals
are assessed, how trust can be generated, and how
organizational connectivity with virtual workers
can be maintained (Raghuram et al., 2001).
To ensure performance, all interdependent tasks
performed by project teams require integration
(Hoegl et al., 2004). In addition, organizations
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Project Teams and Their Role in OPM 203
need processes that integrate project-management-
related activities and the project teams in charge of
executing these tasks and in meeting common
goals. The next section discusses the relationship
between OPM and project teams, and explores the
concept of integration as a core component of this
relationship.
What Is the Relationship between
Project Teams and OPM?
Integration as a Key Component
of the Relationship between Project
Teams and OPM
So far, we have discussed three aspects of project
teams: core teams, their integrative role, and
multiteam systems. At the project level, project
managers in a single project manage the interde-
pendencies within the team members and with the
organizational level to execute the project. At the
program level, program managers will also
manage the interdependencies with the organiza-
tion and with the multiple team members of each
project that are part of the program, and govern the
execution of all related projects in the program.
At the project portfolio level, there is no direct
management or integration of project or project
teams by project portfolio managers. The role of
the project portfolio managers is to make sure that
the organization is selecting the right projects and
programs and that these projects have the adequate
resources to execute their tasks. Projects are car-
ried out by single or multiple teams to perform
interdependent tasks that require integration
(Hoegl et al., 2004).
OPM plays an integrative role for project team
systems executing organizational projects,
programs and portfolios, using different types of
project teams (single or multiple teams). OPM is
the structure and processes by which all organiza-
tional projects and groups of projects (projects,
programs, and portfolios) are governed (Drouin
et al., 2016; Müller, 2016). More specifically,
OPM processes emphasize integration that ensures
adequate coordination between different project
management activities, control that sets goals and
monitors their attainment and, finally, reward to
 204 Nathalie Drouin and Shankar Sankaran
motivate project team members (Child, 2005).
Child (2005) also highlights that, in the organiza-
tional context, there is an emphasis on managing
relationships between roles and units to achieve
a creative and proactive synergy between them,
implying that greater attention should be paid to
integration. Further, according to Child (2005,
p. 79), “integration signifies coordination, cohesion
and synergy between different roles or units in
an organization whose activities are different but
interdependent in the process of creating value.”
The concept could be applied to vertical relations
(e.g., a cohesive process of control) or to horizontal
relations across an organization. Integration is
recognized as being essential to avoid failure
(Child, 2005) and should not be left to chance, for
then it is not likely to happen (2005, p. 79).
According to Child (2005), there are various
mechanisms for strengthening integration, from
simple arrangements for people to meet periodically
to complex, multidimensional structures in which
the contributions of specialized units are coordi-
nated through a matrix arrangement. Teams (all
types of teams: project teams, cross-functional
teams, etc.) are one of the most commonly used
means for achieving integration. Success in achiev-
ing integration using OPM lies primarily in its
ability to integrate the project management
resources, processes and systems and apply them
flexibly to manage project activities strategically
within the organization. Integrative processes facil-
itate the coordination across project management
activities and across the organization.
Analysis of Five Illustrative Interviews
The authors interviewed five experienced project
managers drawn from various industry sectors,
using a set of questions derived from the project
management literature on project teams to under-
stand what happens in practice. A review of this
literature used to construct questions for the inter-
view is presented in Table 14.1.
A purposeful sample of five experienced project
managers who had more than fifteen years of
experience representing different industry sectors
was carried out in Sydney in December 2015.
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The questionnaire that was developed is attached
in Appendix 15.1. It is based on a review of the
literature as well as the authors’ own knowledge and
experience of working in projects. The questions
were divided into three sections:
1. Team autonomy and team building that is
supported by topics such as self- and social
identity, group emotion, collaboration, team
autonomy, teamwork mental models and team
building. (See question numbers 1 to 6 for key
references in Table 14.1)
2. Team effectiveness and project success that
cover topics such as team dynamics, organiza-
tional support, different ways of managing at
different phases of the project, team climate,
motivating environment, use of metaphors for
team interactions, and team work environment.
(See question numbers 7 to13 for key refer-
ences in Table 14.1)
3. Other issues that came up when designing the
questionnaire, such as the relationship
between project teams, projects, programs,
portfolio and project management offices,
time pressure, team perception, teams and
generation gaps, multicultural environment.
(See question numbers 14 to 19 for key refer-
ences in Table 14.1).
Interviews were held in Australia, at the UTS
Business School, by the authors of this chapter.
The five managers came from the following
sectors: Telecommunication/banking, banking
and defense, public sector, construction manage-
ment/education, and IT industry/change
management.
The reason for conducting these interviews was
to confirm what was found in the literature with
a diverse sample of experienced practitioners.
The sample was purposefully chosen based on
personal knowledge of these project managers,
who were associated with UTS as researchers as
well as industry advisory board members of the
university’s Master of Project Management
Program. Each interview lasted between forty-
five minutes to an hour and was recorded and
transcribed. The interviewees were also asked
to add their own views on project teams in
addition to answering the interview questions.
 Project Teams and Their Role in OPM 205

Table 14.1 Review of Literature on Themes on Project Teams

Question
Authors Title Codes Number

Adams & Anantatmula Social and behavioral influences on team Self-identity; social identity; group 1
(2010) process emotion; emotional intelligence
Jassawalla & Sashittal Building collaborative cross-functional Cross-functional teams; 1, 3
(1999) new product teams collaboration
Baiden, Price & Dainty The extent of team integration within Fragmentation, integration; team 11,12
(2006) construction projects performance
Bourgault, Drouin, Daoudi & Decision making within distributed Decision making; distributed teams; 10
Hamel (2009) Bourgault, project teams: an exploration of formalization; autonomy
Drouin, & Hamel (2008) formalization and autonomy as
determinants of success
Drouin & Bourgault (2013) How organizational support distributed Organizational support, team 7, 13
teams effectiveness
Buvik & Rolfsen (2015) Prior ties and trust development in project Trust; teamwork; prior ties; 2
teams: a case study from the construction
industry
Chiocchio et al (2011) Teamwork in integrated design project: Collaboration; trust; conflict 2, 3, 4, 6
understanding the effect to trust, conflict
and collaboration on performance
Eskerod & Blichfeldt (2005) Managing team entries and withdrawals Team composition; entry; 6
during the project life-cycle withdrawal; cohesiveness
Gelbard & Carmeli (2009) The interactive effect of team dynamics Project success; performance; team 7, 13
and organizational support on IT project dynamics; organizational support
success
Henderson (2008) Validation and extension of a research Communication; competency; team 11
model for virtuality, satisfaction and satisfaction; geographic dispersion
productivity on project teams
Hoegl & Weinkauf (2005) Managing task interdependencies in Task interdependency 14
multi-team projects; A longitudinal study
Hsu et al. (2011) Exploring the impact to team mental Teamwork mental models; team 1, 8, 9
models on information utilization and building; information utilization
project performance in systems
development
Schneider (1995) PM in international teams; Instruments for Cultural differences 10, 19
improving cooperation
Lin et al. (2015) The impact of team knowledge on Problem solving competence; 8, 9
problem solving competence in knowledge complement; knowledge
information systems development team location; knowledge deployment
Loo, R (2003) Assessing ‘‘team climate’’ in project Team climate; team building; team 1, 7, 15
teams training
Mueller (2015) Formal and informal practices of Knowledge sharing; organizational 8, 9
knowledge sharing between project teams learning;
and enacted cultural characteristics
Nordqvist et al. (2004) Perceived time pressure and social Time pressure; team processes 9
processes in project teams
Ochieng & Price (2010) Managing cross-cultural communication Multiculturalism; intercultural; 11
in multicultural construction project communication, project success
teams: The case of Kenya and UK

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 206 Nathalie Drouin and Shankar Sankaran

Table 14.1 (cont.)

Question
Authors Title Codes Number

Peterson (2007) Motivation: How to increase project team Team performance; project success; 7
performance motivation
Ratcheva (2009) Integrating diverse knowledge through Multidisciplinary project teams; 17, 18
boundary spanning processes – the case of knowledge diversity; boundaries
multidisciplinary project teams
Shapira, Laufer, & Shenhar Anatomy of decision making in project Decision-making 10
(1994) planning teams
Shazi, Gillespie, & Steen Trust as a predictor of innovation network Innovation; social networks; trust 2, 16
(2015) ties in project teams and trustworthiness
Shelley (2012) Metaphor interactions to develop team Performance behavior; reflection; 7,8
relationships and robustness enhance learning
project outcomes
Sommerville & Dalziel Project teambuilding the applicability of Teambuilding 1 to 6
(1998) Belbin’s team-role self-perception
Inventory
Thamhain (2008) Team leadership effectiveness in Team leadership; teamwork; project 8
technology based project environments performance
Thamhain (2012) The changing role of team leadership in Team leadership; teamwork; project 8, 19
multinational project environments performance
Tseng et al. (2004) Novel approach to multifunctional project Team formation; grey decision 10, 19
team formation making
Zhang & Cheng (2015) Effect of knowledge leadership on Knowledge sharing 8, 9
knowledge sharing in engineering project
design teams: The role of social capital
Berg & Karlsen (2014) How project managers can encourage and Positive emotions, project 5
develop positive emotions in project teams leadership
Aapajoa, Herala, & Haapsalo The characteristics of and cornerstones for Collaboration; integrated team 2, 4
(2013) creating integrated teams
Messner (2015) Measuring existent intercultural Intercultural effectiveness; 19
effectiveness in global teams international teams
Anantamula & Shrivatsav Evolution of project teams for Generation Generation Y, baby boomer 18
(2012) Y workforce generation; generation X; veterans
Müller, Spang, & Ozcan Cultural differences in decision making in Multicultural management; decision 10, 19
(2009) project teams making
Thamhain (1999) Effective project leadership in complex Leadership style 8
self-directed team environments

The researchers used a two-step approach to ana-
lyze the interview transcripts: looking for themes
that were found in the literature; and open coding
from the ground. NVIVO qualitative analysis soft-
ware was used to analyze the data. First, the inter-
views were coded by one of the authors of the
paper, based on codes derived from the interview
questions. An independent researcher, who was
not involved in the interviews, analyzed the tran-
scripts using NVIVO software, looking for new
themes that were not found from the interview
questions. Files in Microsoft Word were created
for each node identified during the analysis, in
which quotes corresponding to the node were

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included. Using these files, prominent themes that
arose from these interviews were identified.
Data Analysis
While the interviews conducted covered a variety of
topics, this analysis will focus on the responses to
three questions related to this chapter:
1. Integration of team wherever they may be
located
2. Relationships between project teams and other
teams; i.e., cross-functional relationships
3. How the management of teams has changed
over the years as the teams have moved away
from being collocated to dispersed teams,
which is the norm these days.
Integrated Teams
While teams may be formed and dispersed as
a project moves along its phases, one of the project
managers, CS, felt that a core team is likely to be
present in long-term projects, often supported by
teams of subject matter experts who may join and
leave the project as required: “There will be some
people that will be there from concept through to
delivery and there will be – like subject matter
experts, that may be there once, for a short period”
(CS). Despite this transitional nature of teams, the
integration of teams during the project was consid-
ered to be of utmost importance: “If we don‘t have
that integration of the team, I think you wouldn’t be
able to get anything done” (GS).
It was also observed by the managers that teams
nowadays are not necessarily colocated due to the
nature of projects: “we’re not necessarily co-
located. That is typical these days [with] project
teams as well. They’re located in various places”
(MN). However, core people may have to be
colocated at certain critical times: “If you have
to co-locate core people at certain times, then
that’s what you actually have to do to get the
outcome” (MN).
More specific to virtuality (MN) highlighted:
“There is no more difference between project team
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Project Teams and Their Role in OPM 207
and virtual team, virtuality is assumed . . . And the
technology to communicate and collaborate is taken
for granted.” (CS) added: “Team members are not
co-located anymore . . . We do not see the person
anymore which is sometimes a challenge that
requires more communication.”
Cross-Functional Teams
Project managers seem to enjoy working with peo-
ple from other parts of an organization from
a learning perspective: “To me, it gave the project
additional interest and also allowed me, as well as
running the project, to actually learn something
from a different functional area that I hadn’t been
involved with closely before” (PT).
Cooperation between cross-functional teams is
expected to promote integration as well.
“So projects, I think, and programs, need to be
integrated into the organization so that the chief
operating officer today says, yes, we need to
advance this service or this product” (PT).
However, these relationships often develop
through informal networking due to need rather
than being formally supported. “The relationship
exists because of the process . . . [from] the outside
it looks like that, but on the inside, it is like, I have
worked with him for a couple of projects, I build
a relationship with him and . . . So you can create
a relationship and that shadow relationship is
what makes things go when things are really
bad” (PT).
However, not all cross-functional relationships
work well. MN expressed the opinion that the way
the organization is structured could be a hindrance
to projects, especially in public sector projects.
For example, “the PMO becomes a hindrance
because they don’t actually [foster cross-
functional collaboration] – and you probably
realize that . . . because of the way they’re struc-
tured. It becomes almost like a bureaucracy.” This
was confirmed by another manager, MK, who felt
that “The PMO in most programs I see tends to be
very mechanistic and operational in nature. They
gather the data, they do the accounting, they do the
reports, they do the on-boarding. There’s very little
higher order stuff that they’re actually doing.”
 208 Nathalie Drouin and Shankar Sankaran
This is a pity because, according to PT, “the
PMO is a vital part of the organization.
It provides support to the project manager who
may not be getting all the support from people
below that he requires.” MK also confirmed this:
‘The PMO really should be supporting the knowl-
edge management system. They should be gathering
the metrics and doing the analysis around perfor-
mance and continual improvement. These are the
higher order things which will make the project and
program much more successful.”
Thus, it looks like organizational structures
and rules stand in the way of cross-functional
collaboration, and any such cooperation often
happens informally.
Changes Over Time
The managers interviewed had worked in a project
management environment for over twenty- to
twenty-five years. When they looked back on their
careers, they stated that, over time, project teams
started getting more and more dispersed and virtual.
Managing projects used to be much simpler: “In my
initial stages [as a project manager], the schedule
meant not extreme task-by-task breakdown. There
were no distributed teams. The engagement of
teams and engagement of a project was also . . .
typically an organization would embark on only
a few projects. Then the pipeline was not crowded
and the organization had a very clear vision of
dedicated resources, even from the business, to
manage the project, to be part of the project. But
that has all changed’” (CS).
Outsourcing has really changed the nature of team
work especially in IT projects, which has had
a change in the roles and responsibilities of project
managers: “We are talking about software which
is automated and which has various types of
scheduling and mind-mapping tools to think and
conquer the parts, and then the teams are distributed,
and then the outsourcing has taken over almost the
entire IT industry around the world in a very shock-
ing way. Everything is outsourced. As an organiza-
tion we are collaborators, we are integrators.
We look after the organizational interest in
a contractual as well as delivery aspect” (GS).
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The way teams work has also been influenced by
generational differences in teams, which also poses
challenges to project managers: “Actually, the gen-
erational change within projects as well, because
when we first started, there was a different way that
you managed projects” (MN).
As teams get dispersed, communication
becomes a very important aspect of any project.
“It is also difficult to get people involved when you
are unable to communicate fact to face. But I think
you’ve got to – this is building the rapport, actu-
ally getting people to communicate with you. It is
a two-way street. You’ve got to keep people
involved” (MN). This certainly makes it difficult
for team building: ”I think because of the geo-
graphic dislocation and the virtual teaming,
teambuilding’s even more important than it was
when we had a co-located model’”(MN). But
the attention to team building which was there in
earlier years is not taken seriously by organiza-
tions. “I think there are going to be industries or
instances out there where team building is right at
the top, but not where I’m working at the moment.
Which is kind of interesting, because I think once
we get serious about innovation it’s going to bring
it all back in again” (MK).
Another aspect of teams that has changed is that
they have become more multicultural. The project
managers interviewed did not see that such diversity
affected their work. On the contrary, they enjoyed
this diversity. “I get invigorated by working with
people from different backgrounds, educational
backgrounds, different races, and different ways of
thinking” (MK).
Over the years, tools used to work with teams
have become more sophisticated to deal with
virtuality more effectively. “I think some of the
tools we’ve got available now are more effective,
easier to understand, than they were years
ago’” (MK).
Discussion
In this section, we compare what we found from the
interviews with what we found in the literature
review. We also highlight some new areas that
have not been covered in the literature that could

point to new research directions about project inte-
gration of core teams and component teams (or
teams of specialists or subject matter experts) as
contributing to project success by the managers
interviewed, which was in line with the literature,
and is evident from the quote, “If we don’t have that
integration of the team, I think you wouldn’t be able
to get anything done” (CS).
Virtuality was viewed as the norm and not the
exception by the managers, especially in software
work, where the work was also outsourced and
teams were not colocated anymore. One of the
points made by the managers, which was not
found in the literature, is the value of tools that can
help collaboration between dispersed teams and can
also help in team development. This was confirmed
by MK, who stated that “I think some of the tools
we’ve got available now are more effective, easier
to understand, than they were years ago.”
The managers interviewed also pointed out the
necessity for building close relationships between
project teams and other teams in the organization,
but to which insufficient attention has been paid.
Often, this is achieved through personal relation-
ships and building trust. These relationships often
develop through informal networking due to need
rather than being formally supported. It seems that
organizational processes that integrate project-
management-related activities and project teams
in charge of executing these tasks and in meeting
common goals do not formally exist in
organizations.
Two of the managers interviewed felt that the
PMO could be the agency to foster cross-
functional collaboration. This idea did not come
up in the literature reviewed. MN stated that “the
PMO becomes a hindrance because they don’t
actually [foster cross-functional collaboration] –
and you probably realize that . . . because of the
way they’re structured. It becomes almost like
a bureaucracy.” Similar views were also expressed
by MK.
The managers did find that the nature of teams
has changed over time, and teams have become
more diverse, intergenerational, and multicultural,
with virtuality taken for granted. While these
changes posed some issues initially, they have
become part of the norm these days. MK stated:
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Project Teams and Their Role in OPM 209
“I get invigorated by working with people from
different backgrounds, educational backgrounds,
different races, and different ways of thinking.”
However, the attention given to team development
has diminished while it is even more important
when diverse teams work together.
Concluding Remarks
The aim of this chapter is to understand what
could be the relationship between OPM and
project teams through the lens of OPM and an
illustrative analysis of interviews with a diverse
sample of experienced project managers. Overall,
our results show that there are no formal integra-
tion processes within organizations to manage the
horizontal relations across project teams and
multifunctional teams. Integration is based on
the informal relationships developed by project
managers and their capability to build a strong
network within the organization. Similarly,
adequate coordination that could be expected
vertically between project-management-related
activities for instance, under the responsibility of
the PMO, seems not to meet the expectations.
Organizational processes need to be developed
in this regard; some rethinking of the PMO role
could be part of this reflection. Our case study also
demonstrates that core teams are essential for the
success of the project. Core teams have the
responsibility to integrate the activities within
the project. Project managers should be capable
of bringing and attracting additional or specia-
lized individuals as the “component project
team” (Chiocchio et al., 2015) at various project
phases to fill the gaps in expertise that is needed
for success of the project (Hoegl, Weinkauf, &
Gemuenden, 2004).
From our investigation, we can also highlight
that OPM could fill the empty space or formal
link between project teams and the organization by
playing an integrative role. This integrative role
focuses on facilitating through formal and informal
mechanisms the dynamic and virtual relationships
and exchanges between team members and cross-
functional teams, and enables interdependencies
between project teams and organizational functions.
 210 Nathalie Drouin and Shankar Sankaran
OPM could also help define common goals and
shared values between team members. It could sup-
port teams in insuring that feedback is provided to
team members by project managers, program man-
agers, and portfolios leaders and making team mem-
bers understand what environmental concerns and
organizational constraints could influence their
functioning (Mathieu et al., 2008). Since teams are
often embedded in multilevel organizational sys-
tems they need support to navigate through these
levels. Team efficacy is dependent on the shared
belief in the team’s collective capability to organize
and execute its tasks (Bandura, 1994, 1997). The
integrative role also signals that OPM should man-
age interdependencies and be responsible to
develop proactive synergy between project manage-
ment activities (projects, programs, and portfolios),
which are different but interdependent, in the pro-
cess of creating PM-related activities’ effectiveness
and value for the organization. Integration should
not be left to chance (Handy, 1993). Success in
achieving integration lies in OPM’s ability to facil-
itate the integration of PM resources, processes, and
systems and apply them malleably to manage and
coordinate across the organization PM teams’
activities.
An additional role for OPM could be in ensuring
team effectiveness in developing input–process–
output mechanisms related to all PM-related
activities and their team effectiveness. This
means that OPM could be involved in the compo-
sition of teams, in terms of making sure that
sufficient resources with adequate profiles are
available for the PM-related activities. OPM
could mediate the translation of inputs into outputs
by meeting team member needs to perform their
tasks. By focusing on task-relevant processes,
OPM not only supports team effectiveness but
also provides support to PM-related activities and
helps team members to be better embedded in the
larger organizational system and reach their
common goals among the PM-related activities
and across the organization (Kozlowshi & Ilgen,
2006). Finally, OPM’s integrative role should
evolve with the teams’ changing environment,
in terms of new challenges that project teams
will face such as cultural diversity and
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intergenerational issues. OPM should be responsi-
ble and support the development of mechanisms
for PM team members to adapt to the changing
environment and teams’ new trends so that team
members can become aware of these changes to
improve team effectiveness.
In terms of future research, research on OPM is at
an early stage. They are plenty of challenges, issues,
and research topics that can be explored. OPM’s
integrative role needs to be refined and deepened.
With this chapter, we have opened up a window of
a possible relationship between OPM and its inte-
grative role and PM teams as a vehicle of integration
with the support of OPM processes. More research
is needed in this regard. We have only explored the
tip of the iceberg.
Appendix 15.1 Questionnaire
for Team Effectiveness and
Relationship to OPM
A Team Autonomy and Team Building
1. How do you help teams develop in projects?
(Keywords: self and social identity, group emotion,
collaboration, team autonomy, teamwork mental
models; team building)
2. How does trust develop in project teams?
(Keywords: prior ties, early formation of practices,
role expectations set, common philosophy, open
communications)
3. How important is collaboration in project teams?
(Trust and conflict management do not work
unless collaboration exists.)
4. How do you manage the transition of team
members during the project?
(Keywords: entry, withdrawal, cohesion,
mentoring)
5. How do you manage emotional issues in teams?
6. Are fully integrated teams essential in projects on
your sector?
(Research show that this may not be essential in
construction.)

B Team Effectiveness and Project
Success
7. How do project teams help to improve success
and performance in projects?
(Keywords: team dynamics; organizational
support; different ways of managing at
different phases of the project; team climate;
motivating environment; use metaphors to
interact; good team work environment to
satisfy personal and professional needs;
developing positive emotions)
8. How do you ensure that a team’s knowledge is
utilized in problem solving?
(Keywords: allocating knowledge, problem-
solving competency; leadership style)
9. How do teams share knowledge in your projects?
(Keywords: formal; informal mechanisms)
10. How do teams make decisions effectively?
(Keywords: issues with cultural differences)
11. What factors contribute to building team effec-
tiveness in a project?
(Keywords: team climate; team training)
12. On a scale of 1 to 5, how much do you think
team effectiveness contributes to a project’s
success?
13. How important is organizational support for
effective working of teams in a project?
C Other issues
14. What is the ideal relationship between project
teams and (other) teams in an organization?
(Keywords: relationship with portfolio, pro-
grams, PMOs)
15. What factors affect teamwork negatively in
projects?
(Keywords: time pressure)
16. How do you promote innovation in project
teams?
(Keywords: perception of others – benevolent
and have good integrity
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Project Teams and Their Role in OPM 211
17. How has management of teams changed over
your career as a PM?
18. How have you dealt with the generation gaps in
your teams?
19. What are some issues that you have faced in
managing multicultural teams?
(Keywords: leadership; dealing with complexity)
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 CHAPTER
15
REAL Knowledge at NASA
A Knowledge Services Model for the Modern
Project Environment
ED HOFFMAN and JON BOYLE
Introduction
How can organizations and practitioners best lever-
age project knowledge and knowledge services
(KS) to get things done in the modern complex
project environment? Practitioners say it is increas-
ingly difficult to bring ideas to fruition and projects
to successful completion. Strategic initiatives fail
and projects are not aligned to strategy; bureau-
cracy, regulations and politics, paralyze action;
and the pace of decision-making, progress, and
management of change are not what they could or
should be.
This chapter focuses on Project Management
(PM) as the most flexible and adaptable framework
through which organizations and individuals can
achieve realistic outcomes and results in an
environment where a rapid pace of change impacts
organizational, social, technical, strategic, and
administrative systems. This management metho-
dology is flexible and adaptable enough to span
the operational and strategic contexts to accommo-
date change, yet rigorous enough to ensure that
progress continues toward goals and objectives in
the most efficient and effective way possible. In
addition, a project knowledge systems perspective
that focuses on accelerated learning best addresses
Disclaimer: This material is based upon work
supported with resources and the use of facilities at
the National Aeronautics and Space Administration
(NASA), Office of the Chief Knowledge Officer and
is available as open source information and may be
used by external individuals and organizations with
proper author citation.
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handling complexity within a complex environment
of increasingly constrained resources for projects
that matter within an organizational hierarchy or
network.
The case for emphasizing accelerated learning
through knowledge services to improve perfor-
mance in the modern complex project environ-
ment is strong. From a global perspective,
learning as an overall activity is rapidly expand-
ing in all parts of the world, but is difficult to
define because of a diverse set of learning agents;
a wide array of institutional and financial spon-
sors; a wide chasm of learning needs; a diverse set
of laws, policies, rules, regulations, and cultures
that influence the application of knowledge; and
an increasingly large number of ways for people
to participate in learning activities. Moving to an
organizational projects perspective, learning is
alternately enabled and hindered by the rapid
development and implementation of technologi-
cal tools and the accompanying relentless pace of
change and churn. Organizations are struggling
with the requirement that learning be accelerated
to accommodate the explosion of data, informa-
tion, knowledge, and wisdom so that pragmatic
solutions can be implemented for projects that
matter within an organizational hierarchy or
network.
This chapter helps answer the question of how
best to leverage project knowledge and knowl-
edge services to get things done, implementing
projects that matter in the modern complex pro-
ject environment. The Rapid Engagement for
Accelerated Learning (REAL) Knowledge
Model is presented as a descriptive model of
how knowledge flow and knowledge services
215
 216 Ed Hoffman and Jon Boyle
can work in a particular organizational context,
allowing organizations to formulate knowledge
activities that address identified strategic knowl-
edge imperatives, achieve buy-in across diverse
communities, and accelerate learning to reduce
complexity and ensure that risks based on knowl-
edge are identified and mitigated or eliminated.
It is anticipated that future research can advance
the understanding of the components of this
model to achieve normative assumptions, defini-
tions, and standards that promote effective and
efficient knowledge practices that reduce
complexity and accelerate learning to achieve
successful outcomes.
The Project Knowledge Environment
How can organizations and practitioners best lever-
age project knowledge and knowledge services to
get things done in the modern complex project
environment?
Based on research, experiences and conversa-
tions across public, private, government, industry,
academia, and professional organizations, practi-
tioners say it is increasingly difficult to bring ideas
to fruition and projects to completion. This diffi-
culty is reflected through several facets of recent
research. One study found only 56 percent of stra-
tegic initiatives meet original goals and business
intent in surveyed project organizations, and 48
percent of projects that are not highly aligned to
organizational strategy succeed (Project
Management Institute, 2014). NASA collaborated
with Aviation Week and industry leaders on the
second annual Young Professionals Study and dis-
covered that the top frustration of the under-35
workforce was bureaucracy and politics and that
there is no time to innovate and create (Anselmo
and Hedden, 2011).
Experience at NASA over thirty years suggests
that significant improvements can be gained
through a focus on the capture and flow of
project knowledge in terms of organizational,
individual, and team project factors within an
organizational systems perspective. For NASA,
knowledge involves the unique requirements,
solutions, and expertise shared across individuals,
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teams, projects, programs, Mission Directorates,
and Centers, often defined as codified knowledge
(scientific knowledge, engineering and technical
knowledge, and business processes) and know-how
(techniques, processes, procedures, and craftsman-
ship), presenting the classic dichotomy of explicit
and tacit knowledge where Polanyi (1966) first says
of tacit knowledge, “we can know more than we
can tell.” There are also other relevant types of
knowledge that play a significant role, such as
that in a social context. In one example, Neffinger
and Kohut (2013) emphasized the importance of
perceptions of strength and warmth in interpersonal
and team environments and how an optimal balance
of these characteristics informs social situations.
A better understanding of the social context of
project knowledge can serve as a basis for
improved prioritization and a more pragmatic
approach to problem solving. Organizational disre-
gard for this type of knowledge can lead to project
failures such as the NASA Challenger and
Columbia shuttle disasters (Hoffman and Boyle,
2013), where the technical root causes were inves-
tigated but the underlying causes were poor team
communications and lack of organizational
learning.
NASA, at the end of the day, is a project organi-
zation. The driving motivation concerning knowl-
edge is ultimately mission success. Complexity
works against this focus on mission success, and it
can take many forms:
• Confusing, vague, poorly defined priorities, stra-
tegies, lines of authority, governance, policies,
roles and responsibilities and support, character-
ized by iterative reorganizations, constant budget
changes, constant resource level adjustments, a
proliferation of administrative burdens, and end-
less requirements.
• A proliferation of customers, stakeholders, and
strategic partner interfaces at multiple levels of
interest, involvement, and responsibility.
• Technical complexity and system integration
issues within and across multiple disciplines and
systems.
• Increased amount and availability of data and
information for process input, throughput, and
output.

• Multiple overlapping, conflicting, outdated
processes and procedures that involve multiple
points of contact distributed across multiple orga-
nizational levels and across multiple oversight
and advisory entities, characterized by competing
priorities, strategies, lines of authority, govern-
ance, policies, roles and responsibilities, and
support requirements.
Complexity drives a rapid pace of change that
impacts organizational social, technical, strategic
and administrative systems. Davenport and Prusak
(1998) recognized this when they defined future
success in terms of organizations that know how
to do new things well and quickly. The shelf-life of
products and services is increasingly shortened,
requiring a management methodology that is flex-
ible and adaptable across the operational and stra-
tegic contexts to accommodate change, yet rigorous
enough to ensure that progress continues toward
goals and objectives in the most efficient and effec-
tive way possible. PM is a discipline often applied
to achieve this flexibility and adaptability, thus
handling the knowledge requirements for projects
to better perform under these increased burdens
makes sense. For NASA, a project knowledge
systems perspective best addresses handling
complexity within an environment of increasingly
constrained resources.
As mentioned, one form of complexity is the
amount of available data and information.
According to the independent research organization
SINTEF (Dragland, 2013), 90 percent of the data in
the world at that point had been generated in the past
two years, an incredible statistic that reinforced a
claim by former Google chief executive officer Eric
Schmidt at the 2010 Techonomy conference
(Kirkpatrick, 2010) that humans currently create
as much information in two days as they did from
the dawn of man through the year 2003. Regardless
of competing perspectives from diverse organiza-
tions, it is an accelerating revolution of data, infor-
mation, and knowledge that demands effectiveness
and efficiency in the core processes of how it is
captured and retained, shared and applied, and
results in discovery and creation.
Change is accelerated by this expansion of data
and information and requires organizations to
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REAL Knowledge at NASA 217
better address strategy and decisions. Learning is
alternately enabled and hindered by the pace of
technological change. On the one hand, it ensures
data and information availability 24 hours a day,
seven days a week. On the other hand, the cap-
ability to process the data and information into
usable and actionable knowledge and wisdom and
to focus organizations and practitioners on imple-
menting solutions suffers. This wealth of data and
information interferes with focusing, prioritizing,
and moving confidently into the future because
planning often suffers when new data and infor-
mation obscures the original intent. The inductive
process of building a list of good ideas is worth-
less without the deductive prioritization of what is
truly important in terms of context, urgency, and
relevance – the magic that is delivered through
good leadership.
This burden of change is ultimately placed
squarely on the shoulders of what is termed the
NASA technical workforce, practitioners possessing
specialized skills that contribute to engineering
efforts involving the disciplines of math, science,
and technology. Over the years, their responsibility
has shifted from a focus on the operational project
objectives of scope, technical performance, quality,
schedule, and cost to a more encompassing responsi-
bility of functional activities that includes business
management, commercialization, new technology
identification and development, strategy develop-
ment, and much more.
What is the nature of these barriers and complica-
tions originating from multiple sources on the
path to achievement? Some are political, others
are related to competence at the organizational,
team, and individual levels. Some concern leader-
ship capability accompanied by poor communica-
tions up, down, or laterally in the organization.
Perhaps there are incorrect, ill-defined expectations
and a lack of strategic alignment in the project
or across the larger organization. Others may reflect
significant external market or business change.
Regardless, they conspire in the dark corners of
organizations to create a lack of focus and mission,
a fragmenting of common purpose into special
interests and personal agendas, and ultimately sta-
sis, a potential death knell for modern organizations
in a volatile competitive world.
 218 Ed Hoffman and Jon Boyle
A strategic knowledge systems perspective is
essential to uncover and define project relationships
and the risks inherent in project knowledge inter-
faces. This is critical, since it provides insight into
the nature of the realities that others live in. Unless
this is analyzed and contingencies are planned
for, the risk of failure increases. Fortunately, the
message is getting through to senior executives. In
a Conference Board (Hackett, 2000) research report
on Knowledge Management (KM), 80 percent of
surveyed organizations had KM activities under-
way, 60 percent expected an enterprise-wide KM
system within the next five years, and 25 percent
had a chief knowledge officer (CKO) or chief learn-
ing officer in place. At the end of the day, capturing
and effectively relating the journey to achieve out-
comes is a story that each individual and team
creates and shares. For NASA, key knowledge
imperatives and knowledge tools have been devel-
oped over the years to help project teams in their
efforts. Relating this context helps in understanding
where NASA is today and how these lessons can
inform other project organizations.
Historical Context of Project Knowledge
Services at NASA
In pursuit of what really works in project
knowledge, how did NASA evolve to the point of
appointing the first CKO for the Agency and
establishing Center and Mission Directorate CKOs
across the organization?
Many organizations face defining events that can
drive organizational change and provide lessons for
the future. For NASA, these defining events at a
macro level are well known not only to employees
but also to the general public. However, the changes
that these events drove in the fabric of the organiza-
tion are not as evident, especially through the lenses
of knowledge and organizational learning.
As discussed in previous articles addressing the
historical context, governance, and priorities of the
Agency knowledge services (Hoffman and Boyle,
2013), there are several events that have shaped the
Agency. One was the Challenger disaster in 1986
that killed seven astronauts and forced the Agency
into brutal introspection. It resulted in the creation
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of a training program called the Program and Project
Management Initiative (PPMI) that promoted PM
capabilities in advance of Agency needs. At a time
where large, expensive, long-duration programs and
projects developed project practitioners through
individual experience, coaching, and mentoring,
this disaster forced a change toward systematized,
codified, and vastly improved individual preparation.
Another defining event comprised the Mars
Mission Failures in 1998–1999 (the Climate
Orbiter, Polar Lander, and Deep Space 2 probes)
that occurred during the era of Faster, Better,
Cheaper (FBC), a management paradigm adapting
NASA to increasing mission demands in an envir-
onment of diminishing resources. These mission
failures and the resulting investigations changed
the Agency focus from individual to team capabil-
ities and shifted emphasis to shared stories; the
development of new policy guidance to prevent
the operational mistakes that drove the failures;
and a more disciplined approach to include better
testing in science missions that did not involve crew
safety issues.
The Columbia disaster echoed the Challenger in
2003, where the detaching foam damaged the wing
on ascent of the vehicle and ultimately resulted in
vehicle disintegration upon descent, killing seven
astronauts. The Columbia Accident Investigation
Board (CAIB) discovered that NASA managers
made assumptions that were technically indefensi-
ble, such as that the leading edge materials were
tougher than the thermal tiles and could not be
easily compromised. They also found that team
processes, communications, and interpersonal
dynamics were ineffective and NASA managers
heard but did not listen to engineering and
safety concerns (National Aeronautics and Space
Administration, 2003). As a result, technical
options were not fully explored and the vehicle
and crew were lost. This forced a relearning of
lessons from case studies, new multidisciplinary
knowledge sharing forums, and major governance
and policy changes such as: the creation of the
NASA Engineering Safety Center (NESC) to sup-
port technical knowledge and capability; a change
in NASA governance on the balance of power in
technical missions; and an emphasis on defining
technical authority in mission decisions. NASA

also adopted mechanisms to improve communica-
tions and interpersonal dynamics that can
defeat Organizational Silence, the tendency to say
or do little despite the presence of significant orga-
nizational threats, and Normalization of Deviance,
the organizational acceptance of risky situations and
behavior due to increased frequency over time
(Vaughan, 1996).
The ghosts of Challenger and Columbia still
haunt the Agency. In 2011, the NASA Aerospace
Safety Advisory Panel (ASAP) reported that the
Agency needed to create a more systematic
approach in capturing implicit and explicit knowl-
edge and recommended the appointment of a formal
Agency-level CKO, supported by a set of appointed
CKOs at each Center and Mission Directorate. This
panel was established in 1968 to iteratively evaluate
NASA, through direct observation of operations
and decision-making, in terms of safety perfor-
mance and providing advice to NASA senior lea-
dership on how to improve that performance. In the
aftermath of the Columbia accident, Congress
required that the ASAP submit an annual report to
the NASA Administrator and to Congress. The
annual report examines Agency compliance with
the recommendations of the CAIB, as well as man-
agement and culture factors related to safety.
Recently, the ASAP review team asked NASA
project personnel, “What is being done to ensure
these lessons are being formally and systematically
captured and made accessible across the whole
organization?” The responses indicated there was
no system that effectively captured, shared, and
allowed other projects to find these critical lessons.
The issues of searchability, findability, and applic-
ability continue to be a great challenge. Projects are
committed to identifying and sharing critical knowl-
edge and lessons within a team, but it is rare to find
knowledge across a system of systems and across
project boundaries. In an increasingly complex and
interconnected world, this integration can spell the
difference between success and failure.
The Agency readily concurred with the CKO
recommendation in 2011, focusing the Agency KS
effort by appointing an Agency CKO within the
Office of the Chief Engineer and designating CKO
positions across Centers, Mission Directorates, and
Functional Offices. The OCE evolved its functions
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REAL Knowledge at NASA 219
toward serving as an enterprise-wide Project
Management Office (PMO), creating a structure
responsible for developing and implementing the
strategy, policy, standards, workforce development,
advanced concepts, mission architecture, integra-
tion across program and mission boundaries, and
program assessment for overall technical workforce
development that supports project and program
success at an enterprise level (PMI, 2012).
NASA Knowledge Services Governance
and Strategic Imperatives
Any NASA knowledge management approach
needs to be adaptable and flexible to accommo-
date the varied requirements and cultural charac-
teristics of each Center, Mission Directorate, and
Functional Office. A Federated model was the
best fit for the Agency, defining the NASA
CKO as a facilitator and champion – not an over-
seer or direct manager – for Agency knowledge
services. It struck a balance between autonomy
and responsibility, where Centers, Mission
Directorates, and Functional Offices were free to
determine the knowledge approach that best fit
their particular needs, but were responsible to
share knowledge that benefitted the overall
Agency. The governance document for NASA
Knowledge (National Aeronautics and Space
Administration, 2013) was collaboratively rewrit-
ten because NASA had greatly expanded its
knowledge activities over the past several years
to include a wider array of services than simply
capturing and retaining lessons-learned.
The new policy ensured that NASA manages
knowledge resources in a way that enables the
Agency to execute programs, projects, and
missions with the highest likelihood of mission
success, emphasizing a KS-integrated strategic
framework. It also defined the roles and responsi-
bilities for CKOs at the Centers, Mission
Directorates, and Functional Offices. The new
policy addressed a set of KS priorities that clar-
ified NASA objectives for project knowledge and
emphasized the development and implementation
of future knowledge initiatives, measures, and
metrics (Figure 15.1):
 220 Ed Hoffman and Jon Boyle
Networks,
alliances, and
communities
of practice
PEOPLE
Effectiveness
Culture of
openness
and
sharing
Figure 15.1. Knowledge services strategic framework.
• In terms of people, sustain and expand the use of
the agency’s intellectual capital across NASA’s
enterprises and generations through better net-
works, alliances, and communities of practice.
• In terms of people, increase collaboration across
organizational barriers through promotion of a
culture of openness.
• In terms of systems, support the technical work-
force in executing NASA’s missions efficiently
and effectively through lessons learned, mishap
reports, and promulgation of best practices.
• In terms of systems, create an integrated infra-
structure of knowledge that identifies the value of
information and aligns practitioner and organiza-
tional imperatives through accessible information
and user-friendly services.
One of the most striking things that the Agency’s
knowledge community discovered was the sheer
depth and breadth of activity underway across the
Agency. Some was found through self-service, such
as typing a query in a search box and getting
answers that point in the right direction, involving
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Accessible
information,
user-friendly
services
SYSTEMS
Infusion of
lessons learned,
mishaps, and
best practices
one person at a time, and worked best with explicit
knowledge that does not require a lot of context or
personal judgment. At the other extreme, tacit
knowledge that was dependent on context and per-
sonal judgment was transmitted through social
interaction at meetings and storytelling.
Given this range of knowledge activities, the
NASA knowledge community identified an initial
set of knowledge categories that addressed most of
the activities taking place across NASA that could
be populated on the first-ever Agency Knowledge
Map (Figure 15.2):
• Online Tools – Include but are not limited to:
portals; document repositories; collaboration and
sharing sites; video libraries.
• Search/Tag/Taxonomy Tools – Dedicated search
engine for knowledge (e.g., Google Search
Appliance) and any initiatives related to meta-
tagging or taxonomy.
• Case Studies/Publications – Original documents
or multimedia case studies that capture project stor-
ies and associated lessons learned or best practices.
 REAL Knowledge at NASA 221

Case Studies/
Publications

GSFC
GRC Rogers Face-to-Face
Zerick Knowledge Services
ARC
Mendoza

LaRC
DFRC
Ambur Online Tools
Neal

Knowledge
Networks
MSFC
SSC Thomas
Stealey
Lessons Learned/
JPL
JSC Knowledge Processes
Oberhettinger
Engle
KSC
Bell
Search/Tag/
Taxonomy Tools

Mission Directorates (HQ) Cross-Agency Resources (HQ)

ARMR HEOMD SMD APPEL NESC NEN NSC OHCM OP STI

Minor Lengyel Albright Hoffman Yuchnovicz Topousis Lipka Leo Moses Bieraman

Case Face-to-Face Online Tools Knowledge Lessons Search/Tag

Studies/ Knowledge Networks Learned / / Taxonomy
Publications Services Knowledge Tools
Processes

Figure 15.2. NASA Knowledge Map and legend.

• Lessons Learned/Knowledge Processes – Any locator; mass collaboration activity; workspaces

defined process that an organization uses to
identify or capture knowledge, lessons learned,
or best practices, including: Lessons Learned
Information System vetting process; organiza-
tion-specific lessons learned processes; bench-
marking; cases; knowledge sharing recognition
programs; knowledge product validation pro-
cesses; communications about expectations
related to knowledge sharing.
• Knowledge Networks – Any defined knowledge
network, such as: a community of practice; expert
specifically designed to enable exchanges and
collaboration.
• Social Exchanges – Any activities that bring
people together in person to share knowledge
(e.g., forums, workshops, Lunch and Learn/
Pause and Learn). The reach of these activities
can be multiplied through online tools such as
videos and virtual dialogues.
The Agency is now linking all identified products
and series to the map and creating active links to the

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 222 Ed Hoffman and Jon Boyle
resources. The categories are not a perfect fit
for every type of knowledge activity across
diverse organizations and multiple disciplines,
but the hurdle cleared was the awareness that the
perfect is the enemy of the good. The knowledge
community used these categories as an initial
starting point that could be institutionalized,
modified, and clarified during subsequent
iterative reviews.
The NASA knowledge community also recog-
nized that there are valuable lessons to be learned
from other domestic and international organizations
in the Federal government, industry, academia,
and professional organizations. In extending the
community beyond the core NASA footprint, the
CKO Office is involved with several important
communities of practice, two examples of which
are: the Federal Knowledge Management (KM)
Community that meets quarterly for sharing best
practices and leveraging lessons learned; and the
International Project Management Committee
(IPMC) and Knowledge Management Technical
Committee under the International Astronautical
Federation (IAF).
Strategic Imperatives in the Modern
Project Knowledge Environment
With the NASA historical context in mind and
reflecting on its journey to project excellence,
what has emerged as driving strategic imperatives
that inform the development of KS at NASA and,
through analogy, other organizations?
At its core, NASA is a project organization
fixated on mission success. There are 12 mutually
reinforcing strategic imperatives that have emerged
from interviews, studies, and experience. These
guide the design, implementation, and evaluation
of KS for NASA, and are discussed in no particular
order of priority.
One critical strategic imperative is Leadership. It
is ironic that one of the more fragmented disciplines
provides valuable answers for the application of KS
in organizations. Without effective leadership, KS
and its results are at best serendipitous, at worst
failures. The essence of leadership occurs with an
insight that things should change, but also with a
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profound realization that the reasons for change
may be clear to leaders themselves but not necessa-
rily to others. There exists an external stakeholder
community as well as a core internal project team to
lead, and both should be understood and managed.
Additionally, good leaders align projects with
organizational strategy, mission and goals, admit-
tedly easier said than done in the modern environ-
ment of information overload and change. Successful
implementation happens with a carefully articulated
vision, leadership focus on that vision, and attention
to detail on implementation.
It is a Project World. Varied organizations world-
wide require a methodology allowing for rigor in
managing temporary, unique initiatives toward the
achievement of defined requirements and project
goals and outcomes that are aligned to organiza-
tional strategy in an era of constrained resources.
In this context, PM is uniquely positioned as an
adaptable discipline that fits these requirements
and can maximize the use of learning to promote
efficiency and effectiveness. Again, the alignment
of project goals to organizational strategy through
good leadership is critical.
Knowledge is the essential element for the crea-
tion of successful physical and virtual products and
services. It can be viewed as an organized set of
content, skills, and capabilities gained through
experience as well as through formal and informal
learning that organizations and practitioners
apply to make sense of new and existing data and
information. Knowledge can also exist as pre-
viously analyzed and formatted lessons and stories
that are already adaptable to new situations. The
ascendance of leaders who can validate the realities
to which projects they are able to apply knowledge
and base decisions on, is key.
Talent Management addresses the specification,
identification, nurturing, transfer, maintenance, and
expansion of the competitive advantage of practi-
tioner expertise and competence. It encompasses
the broad definition of diversity that goes beyond
the classic categories of color, race, religion, and
national origin to domestic and international
variables important to geographically dispersed
multicultural teams, such as multigenerational,
cross-disciplinary, and cross-experiential variables.
This allows diverse groups to bring a diversity of

experience, attitudes, knowledge, focus, and
interests to the table, strengthening both inductive
and deductive problem-solving approaches and
nurturing innovation. Good leaders link talent
management with executive sponsorship, organi-
zational strategy, and the core work of the
organization. They also achieve operational effi-
ciencies by learning, working, and collaborating
together at a distance independent of time
and geography and leverage smart networks that
provide content, access, and connection to project
data, information and knowledge. For NASA,
talent management is represented as the variables
of Abilities, Assignments, Attitudes, and
Alliances (Figure 15.4).
Portfolio Management integrates projects with
strategy and creates an organizing framework and
focus that drives organizational purpose and activ-
ities. It provides a centralized function that promul-
gates a systems view of knowledge, where stove-
piped disciplines and activities can transcend
boundaries and discover and apply cross-disciplin-
ary knowledge to increase competitive advantage
and better achieve results. Organizational expecta-
tions can also be tested against reality at this level
and adjusted and communicated accordingly to
eliminate or mitigate errors and achieve better
decisions.
Certification establishes objective, validated
standards and functions to benchmark achievement
in defined categories of practitioner performance
and capability. It also provides organizations and
practitioners a way to establish trust with super-
iors, peers, team members, customers and stake-
holders, and provides a framework for adapting to
change as well as a method to address emerging
performance requirements. For practitioners, it
provides a roadmap for individual development
and serves to link organizational performance and
individual capability (Duarte et al., 1995). Since
people are essential in projects, certification allows
for objective definitions of the four Talent
Management variables of Abilities, Assignments,
Attitudes and Alliances. An example of a disci-
pline standard is the Project Management Body of
Knowledge (Project Management Institute, 2013),
which specifies the 10 knowledge areas that
currently define the framework of the discipline.
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REAL Knowledge at NASA 223
Transparency is an important consideration as
the network of organizational portfolio sponsors,
project team-members, customers, stakeholders,
strategic partners, suppliers, and other interested
parties tie into organizational strategy and project
operations through information and communica-
tion technology tools. In this environment,
nothing is hidden for long and errors travel at
the speed of light. Communications with each
interface should be carefully defined across
intensity and frequency dimensions; for example,
where external stakeholder communities may
expect to be informed about progress at a higher
level, but not as frequently or as in-depth as
internal leadership. Transparency that is formally
built into the strategic business process
encourages innovation, translating economies of
scale and a breadth of experiential lessons into
innovation and flexibility.
Frugal Innovation (The Economist, 2010) is a
mindset that views constraints in an era of
restricted and diminished resources as opportu-
nities, leveraging sustainability and a focus on
organizational core competencies to reduce
complexity and increase the probability of better
outcomes. Sustainability, in particular, has gained
momentum as the cost to the planet and availabil-
ity of resources increasingly impact business
decisions. Organizational core competencies for
a product or service involves what it must do
in depth rather than what it can do in breadth,
ensuring that organizational capacity in areas
such as technological, social, political, economic,
and learning dimensions are part of the frugal
innovation process. In a mutually reinforcing
perspective, imperatives such as Transparency
allow the broader team to share knowledge and
experience to improve and innovate in terms of
products and services, supporting the Frugal
Innovation effort.
Accelerated Learning is the tactic of employing
state-of-the-art digital technologies, traditional
knowledge-sharing activities, modern learning stra-
tegies, social media processes and tools, and cross-
disciplinary knowledge into the broadest possible
view of learning for an organization. The opera-
tional knowledge process is closely linked to key
internal and external knowledge sources and serves
 224 Ed Hoffman and Jon Boyle
to clarify organizational expectations to optimize
knowledge searchability, findability, and
adaptability.
A Problem-centric Approach emphasizes a
non-partisan, non-biased, non-judgmental, and
pragmatic orientation toward problems and solu-
tions, keeping the focus on achievement, improve-
ment, and innovation. Organizational expectations
are kept pragmatic and constructive when a pro-
blem-centric approach is encouraged and expected.
At the end of the day, it is about problems, commu-
nications, power and building a community of
support focused on credible challenges. This orien-
tation serves as the fuel for change while addressing
competing agendas and administrative barriers, and
directly addresses the issue of bias and heuristics
that may introduce error in decisions.
Governance, Business Management and
Operations provide for pragmatic alignment,
oversight, approvals, and implementation of
project operations and establishes rigor and pro-
cesses. In an era of Frugal Innovation, manage-
ment of the budget and clarity of funding
requirements that supports the overall effort
must be visible and valued by the leadership
and the workforce. Nothing brings trouble faster
than mismanagement of funds and a lack of focus
on funding flow, so the oversight, tracking,
and implementation of project activities need
definition. Defined governance addresses the
issue of siloed implementation and raises execu-
tive awareness as well as formalizing successful
localized grassroots efforts.
Digital Technology makes it possible to examine
new frontiers of potential knowledge and access
multiple sources of data and information, but simul-
taneously causes organizations to be increasingly
buried in data and information and have less time
for focus and reflection. Technology is necessary
but not sufficient for KS, but wonderful things
can result from the application of technology, such
as open, social network-centric, non-proprietary,
adaptable, and flexible frameworks that accelerate
learning processes to deliver the right knowledge at
the right time for particular needs while respecting
context. The proper application of technology helps
achieve learning results and better decisions at a
lower cost.
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The REAL Model
With the project environment, strategic knowl-
edge imperatives, and defining events serving as
a framework, there was a critical need for a project
KS Model that describes the interfaces, variables,
and components. However, the last thing needed
was a normative model prescribing knowledge
methods specific to siloed processes and tools as
opposed to broader integrated approaches that are
able to accommodate complex organizational
strategies.
What analogy could another discipline provide
in terms of a systems approach for better
understanding the role of knowledge and learning
in organizations? The entanglement principle of
quantum theory suggests that the measurement of
the state of a qubit (a unit of quantum information)
determines the potential states of other qubits it
is linked to regardless of distance, but itself is
only definitively defined when observed, prompt-
ing Einstein’s famous description of “spooky
action at a distance” (Bell, 1987). In extending
the analogy, information can be understood when
local knowledge is applied, but can be misunder-
stood if the information exists across levels of
organization and time that lack context and drives
interpretations colored by assumptions, biases,
politics, personal agendas, and emotions. In
this analogy, leaders applying an incorrect mea-
sure in defining the data and information could
corrupt the original meaning and extract the
wrong lessons, just as applying the wrong measure
in physics would corrupt the hypothesis being
tested. Retaining and learning not only the lesson
but also the context allows practitioners the
potential to adapt lessons to diverse project
environments.
According to the Conference Board (Hackett,
2000), executives may not be familiar with or
possess experience in the KM discipline, resulting
in a lack of specific knowledge objectives and goals
that can be integrated, measured and managed, thus
leading to the potential extraction of the wrong
lessons. KS suggests a facilitative approach that
not only addresses the topic of knowledge, but
also emphasizes learning as an organization and
ties the importance of knowledge as a resource
 REAL Knowledge at NASA 225

Rapid Engagement through Accelerated Learning (REAL) Knowledge Flow

Challenge/
Opportunity

Capture & Share &

Retain Apply
Individual & Organizational &
Team Societal
knowledge Expectations

Discover &
Create

Project
Outcomes

Figure 15.3. NASA REAL Knowledge Model.

across operational and strategic imperatives, rein- bidirectional in terms of influence and input, a
stating the critical context of the information. guarantee of continuous change, learning and
The NASA CKO Office developed the Rapid adaptation.
Engagement through Accelerated Learning In describing the REAL Knowledge Model, the
(REAL) Knowledge Model (Figure 15.3) to pro- following top-level generic flow serves to illustrate
mote the capabilities of more comprehensively and a potential progression of knowledge activity:
accurately define a problem; to encourage a prag-
1. A Challenge/Opportunity is selected and
matic orientation that informs better decision-mak-
prioritized (characterized by Leadership,
ing; and to help to address the issues of bias, ego,
Knowledge, Project World, Portfolio and
special interests, and personal agendas. At the core
Problem-centric imperatives).
of the REAL Knowledge Model is the operational
2. A learning project plan that complements the
KM cycle activities of capture, share, and discover,
project charter and project plan is initiated (char-
but with an effectiveness measure paired with the
acterized by Knowledge, Accelerated Learning,
knowledge activity. For example: capturing knowl-
Frugal Innovation and Governance, and Business
edge is the action and retaining it is the measure;
Management and Operations imperatives).
sharing knowledge is the action and applying it is
3. The functional communities of practice
the measure; and discovering knowledge is the
are recruited with points of contact identified
action and creating outcomes is the measure.
(characterized by Leadership, Project World,
Surrounding the REAL Knowledge core activities
Knowledge, and Talent Management
are the Individual/Team Knowledge factors and the
imperatives).
Organizational/Societal Expectations that mitigate
4. The core operational KM cycle is supported by
the journey of the Challenge/Opportunity from
specific KS learning strategies, methods, mod-
inception through the knowledge cycle to successful
els, and technology tools to better define the
project outcomes. Note that the process arrows are

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 226 Ed Hoffman and Jon Boyle
opportunity; aggregate the data, information
and knowledge; populate the alternatives for
project decisions; provide appropriate online
and traditional environments to spur and
support innovation through discovery and crea-
tion; and support implementation through
progressive and iterative knowledge support
as the project proceeds through the
lifecycle (characterized by Knowledge, Digital
Technology, Frugal Innovation, and
Accelerated Learning imperatives).
5. Individual and Team Knowledge is leveraged,
encouraged, supported, and enhanced through
KS activities (characterized by Knowledge,
Talent Management, Accelerated Learning,
Transparency, Frugal Innovation, and
Certification imperatives).
6. External environment Expectations in terms
of the organization and broader society are
identified and operationalized into objective
definitions of performance over time and
space (characterized by Leadership,
Knowledge, Transparency, Frugal Innovation,
Accelerated Learning, Digital Technology, and
Governance, Business Management and
Operations imperatives).
7. Project Outcomes are achieved in terms of
improvement and innovation, and the
activity proceeds through closeout to capture
and retain lessons for upcoming projects
(characterized by Knowledge, Portfolio
Management, Transparency, Accelerated
Learning, Governance, Business Management
and Operations, and Digital Technology).
The REAL Knowledge Model component defini-
tions are provided along with associated keywords and
concepts to aid potential future research in taxonomies
and ontologies related to the narrower model and to
the broader knowledge and learning disciplines:
• The Challenge/Opportunity is a problem-centered
issue in terms of a product or service that presents a
potential for action toward defined outcomes.
Possible keywords and concepts include:
Vision and Possibilities; Requirements; and
Organizational Capacity in Technological, Social,
Political, Economic, and Learning.
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• Individual and Team Knowledge are formal and
informal individual and collective education, pro-
fessional development, and lessons from direct
and indirect experience applied to a Challenge/
Opportunity. Possible keywords and concepts
include: Assignments; Abilities; Formal
Education; Professional Development; and
Mentoring.
• Attitudes and Values are the predispositions
based on learning, experience, and the
Challenge/Opportunity to evaluate the environ-
ment in particular ways. Possible keywords and
concepts include: Personality and Inclination;
Resilience; Open-mindedness; Curiosity and
Skepticism; and Tempered Optimism. Note
that these attitudes and values may also be
collectively reflected in Organizational and
Societal Expectations.
• Heuristics and Biases are cognitive shortcuts
and simplifications by individuals, teams,
and organizations used to reduce complex-
ity. Possible keywords and concepts include:
Normalization of Deviance; Problem-
Solving and Decision-Making; Fundamental
Attribution Error; and Culture of Silence.
These may be collectively reflected in
Organizational and Societal Expectations.
• Abilities and Talent are learned or natural
patterns of action for both individuals
and teams that possess the potential to
achieve goals. Possible keywords
and concepts include: Critical Thinking and
Creative Thinking; Problem Solving and
Decision Making; Creating Alliances;
and Leadership and Persuasion. These may
be collectively reflected in Organizational
and Societal Expectations.
• Project Knowledge is the sum of the formal and
informal individual and team knowledge as
previously discussed within the project context
that is applied to existing and new data and
information to a Challenge/Opportunity to
gain efficiency and effectiveness toward
project outcomes. Possible keywords and
concepts include: Success Stories and Failure
Stories; Learning through Analogies; and
Organizational Learning. These may be

collectively reflected and applied through
Organizational and Societal Expectations.
• Expectations are assumptions on the probability
of event occurrence for individuals, groups,
organizations, and societies based on learning and
experience. Possible keywords and concepts
include: Adaptation to Change; Reputation;
Executive Communications; and Past Performance.
• Organizational Culture comprises common
sets of values and assumptions that guide beha-
vior in organizations that inform problem-sol-
ving and decision-making activity. Possible
keywords and concepts include:
Organizational Norms and Mores;
Environmental Context; and Performance
Management.
• Knowledge Capture and Retention is a core
knowledge step involving the identification and
storage of relevant content and skills. Possible
keywords and concepts include: Alliances,
Communities and Networks; Cases and
Publications; Risk records, Mishap reports,
Organizational communications; and Stories.
• Knowledge Sharing and Application is a core
knowledge step involving the representation,
promulgation, and utilization of searchable and find-
able relevant content and skills. Possible keywords
and concepts include: Digital Technology Tools;
Informal Learning; and Best and Emerging
Practices.
• Knowledge Discovery and Creation is a core
knowledge step that covers original content and
skills derived and developed from previous rele-
vant content and skills that result in project out-
comes. Possible keywords and concepts include:
Searchability and Findability; Taxonomies; and
Innovation.
• Project Outcomes are the achievement of original
or improved products or services as defined by the
project charter and validated by organizational
expectations. Possible keywords and concepts
include: Value; Improvement; Innovation; and
Learning, Knowledge, and Growth.
One of the components in the REAL Knowledge
Model, Organizational and Societal Expectations,
needs to be discussed due to its importance when
addressing the topic of complexity. Human
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REAL Knowledge at NASA 227
cognition is colored by inherent hardwired prefer-
ences in thinking and in shortcuts that accompany
decision-making processes, a product of choices
and evolution. Biases and heuristics serve to reduce
the amount of complexity, but also may introduce
error. Additionally, these predispositions may differ
across cultures. NASA represents a complex tech-
nical organization consisting of several divergent
domestic and international cultures with different
perceptions. Understanding these perceptions is
important for the success of NASA’s projects, espe-
cially since 80 percent of NASA programs and
projects are international in nature.
Biases and heuristics are not just cognitive distor-
tions that affect decisions, but also are social biases
that affect individual and organizational behavior as
well as learning and memory tendencies that affect
perceptions and explanations of the world. In our
interview with Nobel Prize-winning scientist Daniel
Kahneman on his recent New York Times bestseller
Thinking Fast and Slow (2013), he clarified how
humans address increasing levels of complexity in
the project environment through heuristics that can
introduce errors into decisions, a veritable catalog of
fundamental predispositions that characterize human
cognition. System 1 thinking is fast, instinctive and
emotional, while System 2 thinking is slower, more
deliberative, and more logical. Kahneman delineates
cognitive biases associated with each type of think-
ing, starting with his own research on loss aversion,
the unsettling tendency of people and organizations
to continue funding a project that has already con-
sumed a tremendous amount of resources but is
likely to fail, simply to avoid regret. From framing
choices to substitution, Kahneman’s book highlights
several decades of academic research to suggest
that people place too much confidence in human
judgment, resulting in different outcomes even
given the same information input.
Biases and heuristics should be viewed not exclu-
sively in a negative context, but one where these
distortions and shortcuts can also provide positive
outcomes. Many projects would not be started if
executives waited until all the data and information
were available to make a rational decision. Biases
and heuristics serve in creating an environment
where possibilities and vision can drive an idea
toward reality. Busenitz and Barney (1997) found
 228 Ed Hoffman and Jon Boyle

understand causes see big go beyond comfort zone

picture
Ability Assignments

recognize natural opportunities to hands-on

expertise aptitude make mistakes
self-
learn from confidence

INTERPERSONAL
experience increasing
PERSONAL

responsibility
EFFECTIVENESS
mentors
motivation
water cooler
willing to collaborate conversations

Attitude Alliances

intellectual listening
recognition peer
curiosity
promote network
healthy context teamwork

Figure 15.4. The 4A Word Cloud.

that there is a fundamental difference in the way that
entrepreneurs and managers in large organizations
make decisions, and that biases and heuristics drive
entrepreneurial decisions and are used to reduce
complexity in the project environment, simplifying
decision-making, and preventing data and informa-
tion from overwhelming programs and projects, as
well as serving to achieve buy-in and motivating
practitioners. This often morphs into a tremendous
disadvantage as projects mature from start-up activ-
ities to implementation and sustainability require-
ments. A brief set of examples from a rather
extensive catalog are:
• Availability: Making judgments on the probabil-
ity of events by how easy it is to think of examples
and their consequences.
• Substitution: Substituting a simple question for a
more difficult one.
• Optimism and loss aversion: Generating the illu-
sion of control over events and fearing losses
more than we value gains.
• Framing: Choosing the more attractive alternative
if the context in which it is presented is more
appealing.
• Sunk-Cost: Throwing additional money at
failing projects that have already consumed
large amounts of resources in order to avoid
regret.
• Mental Filter: Focusing on one feature of
something that influences all subsequent
decisions.
• Fundamental Attribution Error: The tendency
to overemphasize personality-based causes of
behavior and underemphasize situational-based
causes of behavior.
• Egocentric Bias: Recalling prior events in a favor-
able light to one’s self rather than an accurate
objective analysis.
Another important facet of the REAL Knowledge
Model is in what NASA refers to as the four: Ability,
Attitude, Assignments, and Alliances. These compo-
nents of the model are extracted from the
Interpersonal and Team Knowledge, Attitudes and
Values, Abilities and Talent, Knowledge Capture
and Retention, and Knowledge Sharing and
Application components. They are represented in
Figure 15.4 across the personal and interpersonal
dimensions of effectiveness:

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REAL Knowledge Examples at NASA
The problems that NASA projects seek to solve
are often novel in nature, “firsts” or “onlys” that
increasingly demand the application of strategic
imperatives such as frugal innovation, findable
and searchable knowledge, and accelerated learn-
ing. REAL KS derived from the Model are
designed to promote excellence in PM and engi-
neering by building a community of practitioners
who understand the knowledge flow framework of
the organization and are reflective and geared
toward sharing. By facilitating and integrating
agency-wide KS through interviews, forums, con-
ferences, publications, research, and digital offer-
ings, the CKO Office helps ensure that critical
lessons and knowledge remain searchable, find-
able, and adaptable. The CKO knowledge network
extends beyond NASA as well, to include expert
practitioners from industry, academia, other
government agencies, research and professional
organizations, and international space agencies.
This section covers three examples of REAL
Knowledge KS activities.
NASA Critical Knowledge Activity
These are based on discussions with NASA senior
leaders and are conducted by the NASA CKO
Office to identify and understand high priority
lessons learned from the executive point of view
that have significant impact on programmatic and
engineering mission success for the overall Agency.
The intent is to identify an executive most-critical
lessons list and ensure that list is appropriately
captured in Agency-level policies, standards, and
learning and development programs. The REAL
Knowledge framework represents this as executive
knowledge that creates organizational expectations
for ongoing and future projects as well as informing
all three of the central operational knowledge pro-
cess elements and activities. Note that these lessons
are heavily informed by previous program and pro-
ject outcomes. This effort is driven primarily by the
strategic knowledge imperatives of Leadership,
Knowledge, Portfolio Management, Transparency,
Accelerated Learning, Problem-Centric Approach,
and Technology.
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REAL Knowledge at NASA 229
This activity was initiated across Centers,
Mission Directorate, and Functional Office leader-
ship in response to an Aerospace Safety Advisory
Panel (ASAP) recommendation for a continuous,
risk-informed, prioritized, and formal effort in
knowledge capture and lessons learned that will
make them highly visible and easily accessible
across NASA, supplemented by formal incorpora-
tion into appropriate policies and technical stan-
dards of those lessons that are most important to
safety and mission success.
To achieve buy-in at executive level, the process
begins with interviews of senior leaders, designed to
promote a discussion that identifies critical mission
knowledge and high priority lessons learned. For
NASA, it turned out that executives were very
enthusiastic to share their views on these lessons
but did not feel they had the time or a process to
ensure retention, sharing, and discovery of them for
the technical workforce. Examples of sources for
data, information, and knowledge for these lessons
were identified as:
• Program and project reviews
• NASA Engineering and Safety Center (NESC)
Technical Reports
• Mishap findings
• Lessons-Learned Information System (LLIS)
submissions
• ASAP recommendations
• Interviews
• Knowledge-sharing forums
• Other technical findings as appropriate
This activity addresses a factor in the original
question of managing projects in an increasingly
complex project environment. Examples of com-
plex environments abound: the management of the
London Olympics; the development of new phar-
maceuticals; the engineering of new airliners such
as the Boeing 787; and the development of new
weapons systems such as the Joint Strike Fighter.
The multidisciplinary aspect of integrating the tech-
nologies required for these systems is daunting and
requires project managers to juggle several balls in
terms of which choices will result in the best out-
comes for their project. The more disciplines that
are involved, the deeper and faster is the data and
information stream. Managing teams in this
 230 Ed Hoffman and Jon Boyle

environment is another facet of complexity, as well Knowledge Forums

as managing all of the other project interfaces in the
broader environment, so that the expectations of
customers and stakeholders remain reasonable.
Finally, since rarely does a plan remain immutable,
changes of all magnitudes and bandwidth must be
factored into the project equation. Critical
Knowledge services at the front end of the process
help to set and promulgate organizational expecta-
tions as well as identify and leverage existing and
potential digital channels of distribution and
engagement. They also function to identify critical
biases and heuristics at the executive level that can
potentially be mitigated or translated into improved
project measures and metrics.
As the Critical Knowledge activity progresses,
the characteristics of appropriate Agency lessons
were defined in coordination with executives and
the ASAP. To qualify as Critical Knowledge within
this framework, the lessons would need to fit the
following criteria:
• Possess broad applicability across the Agency
that does not only refer to narrow information
and knowledge essential only to a specified dis-
cipline community.
• Represents the top 5 percent of updateable knowl-
edge that is most important for programmatic &
engineering missions to learn and implement.
• Involve knowledge that keeps evolving toward
new applications and missions within a cost-con-
strained organizational environment.
• Lends itself to a formal process under current and
future NASA knowledge services for formal
incorporation into appropriate policies and tech-
nical standards, as well as to technical workforce
learning and development products and activities
to prevent skills dissipating over time.
Once the interviews were completed and analyzed,
the NASA CKO and Deputy CKO reported the results
back to NASA executives and presented a proposal
for the Knowledge Referee process (Figure 15.5) that
would determine lesson applicability, importance,
evolution, and integration. This process is envisioned
to occur biannually at NASA Headquarters and itera-
tively briefed to the NASA Deputy Administrator
and the ASAP as well as the Centers, Mission
Directorates, and Functional Offices.
Communication about the effective use of
knowledge is central to all leadership and man-
agement challenges and is critical to the success
of NASA’s missions and the organization’s long-
term sustainability. The complexity of NASA’s
programs and projects demands an open, vigor-
ous culture where communication is continuous,
empowering individuals and teams at all levels to
ask questions, share information, and raise
concerns.
One form of KS that particularly lends itself
to multiple requirements and formats is the
Knowledge Forum. This format is particularly adap-
table across organizational constituencies and is
cooperatively designed to promote open communica-
tions through a number of channels about best prac-
tices, lessons learned, and new developments at
NASA and throughout the world. These Forums
range from small, engaging one-day events at
Centers to Agency-wide synchronous and asynchro-
nous discussions with leading practitioners, which
are captured digitally and modularized through mul-
tiple distribution channels such as NASA TV. The
Forum service is driven primarily by the strategic
knowledge imperatives of Leadership, Knowledge,
Talent Management, Portfolio Management,
Transparency, Frugal Innovation, Problem-Centric
Approach, Accelerated Learning, and Technology.
Each customized Forum features leading
experts and practitioners selected by the particular
organizational entity and involves relevant
knowledge-related challenges, relevant case
studies, formal and informal discussions, and
networking in order to accelerate learning and
cultivate a vibrant knowledge network that can
benefit NASA and its partners, customers, and
stakeholders. Attendance is both virtual and
physical, and leverages social media for concur-
rent and follow-on engagements.
Just months before the retirement of the Space
Shuttle, a Forum entitled Passing the Torch pro-
vided an opportunity for master practitioners from
the Space Shuttle and Constellation programs to
reflect on some of the lessons learned from the
formulation, development, and operations of their
programs and to look forward to and anticipate

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NASA CKO Knowledge Referee Process

Information Collection Information Evaluation Knowledge Disposition

Information & knowledge Centers/HQs/Mission Directorate/Functional Office

sources for Agency/Centers/ CKOs/POCs follow local knowledge policy to analyze
HQS Directorates/Functional risk and prioritize information and knowledge,

CENTER/HQS/MD/FO
Offices: Knowledge Services
(lessons-learned activities; case
studies; workshops; training;
missions & projects; other).
segregate local and Agency categories, local and
Agency-level knowledge referee items defined & Distribute & implement in local
formatted. Governance, policy, training,
digital tools, taxonomies,
keywords, other.

Centers/HQs/Mission Directorate/Functional Office

CKOs/POCs follow local knowledge policy to capture/ Reports forwarded to local
retain & share/apply information for evaluation in & Agency designates.
semi-annual knowledge Referee process.

Agency CKO chairs semi-annual Knowledge Referee

Panel to categorize, assign risk, prioritize &
recommend information/knowledge disposition
according to NASA policies & guidance; Agency-level
knowledge referee items defined & formatted. Distribute & Implement in
AGENCY

NASA CKO notifies Center/HQs/Mission Directorate/ Agency Governance, policy,

Functional Office CKOs/POCs on semi-annual training, digital tools,
Knowledge Referee process, assembles Knowledge taxonomies, keywords, other.
Referee panel, sets date, agenda, and location.

Information/knowledge
forwarded to distribution
POCs.
PROGRAMS/PROJECTS

Agency CKO briefs APMC, ASAP,

& monitors information/
knowledge outcomes.

Figure 15.5. NASA Knowledge Referee process.

 232 Ed Hoffman and Jon Boyle
future space transportation systems requirements.
As with most KS activities, it was a collaborative
effort across the Academy and the Public Affairs
Offices of Kennedy Space Center and NASA
Headquarters. The program included several panel
discussions, including one dedicated to Young
Professionals from various NASA centers and
academia.
A final Forum example was the Principal
Investigator (PI) Team Forum, an iterative
collaborative effort between the NASA CKO and
the Science Mission Directorate (SMD) that
brought together teams from the Discovery mis-
sion Announcement of Opportunity (AO) process
and the Mars 2016 Trace Gas Orbiter mission to
gain a better understanding of the role of a PI in
NASA. Expert practitioners from past science
missions shared stories, perspectives, lessons
learned, and best practices with their colleagues.
The proceedings from the forum were published in
a multimedia wiki that keeps the knowledge
updated and relevant. SMD currently views this
activity as critical and it is a mandatory event for
new NASA PIs.
Project HOPE (Hands-On Project Experience)
An example of an Agency-wide knowledge
priority that focused on Talent Development as a
priority was a cooperative workforce development
program sponsored with the SMD, called
Project HOPE (Hands-On Project Experience).
Project HOPE was driven primarily by the
strategic knowledge imperatives of Leadership;
Project World; Knowledge; Talent Management;
Frugal Innovation; Problem-Centric Approach;
Accelerated Learning; Governance, Business
Management, and Operations; and Technology.
This KS was designed to provide an opportunity
for a team of early-entry NASA managers and engi-
neers to propose, design, develop, build, and launch
an actual suborbital flight project over the course of
18 months, enabling practitioners in the early stage
of their careers to gain the knowledge and skills
necessary to manage NASA’s real future flight pro-
jects. All of the organization’s governance, business
management, and operations policies, procedures,
standards, and sources of knowledge were applied
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to the project, yielding critical lessons within a real-
world context.
One example project was the joint Ames
Research Center (ARC) and Langley Research
Center (LaRC) Radiation Dosimetry Experiment
(RaD-X), which was designed to obtain the first-
ever, high-altitude dosimetric measurements of
cosmic ray interaction in the upper atmosphere,
while combining LaRC’s unique capabilities in
space weather applications, radiation effects on
air transportation, and microsatellite development
to create a low-risk, high-fidelity mission that
addressed Agency programmatic goals. Public
and private entities currently use the NASA
Nowcast of Atmospheric Ionizing Radiation for
Aviation Safety (NAIRAS) model for informed
decision-making about radiation exposure safety
for flight crews, the general public, and commer-
cial space operations. RaD-X improves NAIRAS
by obtaining data to perform verification and
validation activities that enhance this capability.
The project also strengthens microsatellite
development at LaRC. The RaD-X microsatellite
structure developed at LaRC flies on a scientific
research balloon for 24 hours at approximately
36 km (~120,000 ft), validates low-cost sensors
for future missions, and provides data to improve
the health and safety of all future commercial and
military air crews that transit the poles.
The High Energy Replicated Optics to Explore
the Sun (HEROES) project was a joint effort
by Goddard Space Flight Center (GSFC) and
Marshall Space Flight Center (MSFC). It involved
a balloon-borne hard X-ray telescope observing
solar flares, with 100 times better sensitivity and
50 times more dynamic range than the best solar
observations to date. The instrument provided new
views (improved angular resolution and sensitiv-
ity) of hard X-ray astrophysical targets. The
HEROES team modified and flew the HEROES
telescope to perform solar observations while tak-
ing advantage of night-time for astrophysical
observations. The project built on previous
knowledge from past flight projects at MSFC and
previous GSFC experience in developing instru-
mentation for solar observations and performing
quality solar data analysis. It paved the way for
future generations of both solar and astrophysics

space-borne hard X-ray imager missions, and the
scientists and engineers to support them.
The Development and Evaluation of Satellite
Validation Tools by Experimenters (DEVOTE)
project was flown by LaRC. This project success-
fully achieved its science goals of: enabling eva-
luation of next-generation satellite retrievals
focusing on the ACE Decadal Survey Mission;
developing an in situ measurement platform
that would be available for frequent and relatively
low-cost flights; developing advanced instru-
ments; and comparing measurements to satellite
and ground-based instruments. At the project’s
end, the DEVOTE team had successfully
completed all planned modifications to the
aircraft, enabling both in situ and remote sensing
platforms; flown twelve science flights for over
sixty-nine hours; and successfully completed all
of its science and training objectives.
The Coastal and Ocean Airborne Science
Testbed (COAST) project was flown by ARC
over Monterey Bay, California. The team inte-
grated and simultaneously flew three instru-
ments in the testbed: a sun photometer; an
imaging spectrometer; and radiometers. The
instrument suite obtained data during the
mission coincident with measurements from
existing satellite sensors, measurements from a
research vessel, and a small set of ground
calibration sites.
A final example is the Terrain-Relative Navigation
and Employee Development (TRaiNED) project by
the Jet Propulsion Laboratory. In 2006, an initial
development test was conducted onboard a sounding
rocket flight that collected analog ground imagery
during the descent portion of the rocket trajectory
and positional data from launch to landing. This
data was then used to further develop and test
Terrain-Relative Navigation (TRN) computer algo-
rithms. The TRaiNED project was the next step in the
development of this new technology. As a second
developmental test flight, the TRaiNED project
advanced the first flight results by expanding the
data set to include exo-atmospheric imagery in addi-
tion to descent imagery. Key members from the initial
project acted as mentors for the TRaiNED team and
assisted with the design, fabrication, and testing of the
payload.
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REAL Knowledge at NASA 233
Summary and Future Research
How can organizations and practitioners best lever-
age project knowledge and knowledge services to
get things done in the modern complex project
environment?
For NASA, KS was a steady progression of
maturity influenced by the requirements of specific
missions over time. The Agency today is not the
same one that went to the Moon. Individual
capability driven by internal experts fit the organi-
zation at the beginning, but that soon morphed into a
team-based approach driven by diverse mission
requirements as the purpose of the Agency changed
over the years.
The complexity of the project environment
addressed in this chapter forces KS to adjust to the
new realities of knowledge findability, searchabil-
ity, and adaptability, highlighting the need for
accelerated learning within a systems perspective
and revealing the synergy between the disciplines of
KM and Organizational Learning. Recent stake-
holder messages from 2002 to 2012 have indicated
that NASA needs to take advantage of opportunities
for greater coordination and collaboration across the
organization (ASAP, 2011). The Agency formally
recognized this need by designating the first NASA
CKO to serve at the executive level.
The strategic imperatives that guide the develop-
ment of NASA KS are a product of their times,
addressing the realities and requirements for plan-
ning and action concerning leadership, complexity,
limited resources, communication, knowledge,
individual and organizational capability, and pro-
cess. These imperatives can take different forms,
depending on specific organizational characteristics
and needs at the strategic, operational, and tactical
levels.
For NASA, the Federated approach allowed an
effective balance of autonomy and responsibility.
With this approach, the knowledge community
generated common definitions and purpose and
developed reinforcing products and services that
addressed both local and Agency knowledge
considerations, to include: a new knowledge
policy; an Agency knowledge map; chairman-
ships of the Federal Knowledge Community;
and the development of the NASA REAL
 234 Ed Hoffman and Jon Boyle
Knowledge Model. This model allowed the
Agency to formulate KS activities that addressed
the strategic knowledge imperatives, achieve
buy-in across diverse communities, and acceler-
ate learning to reduce complexity and ensure
risks based on knowledge were identified and
mitigated or eliminated.
The REAL Knowledge Model was presented as
a descriptive model of how knowledge flow
and knowledge services work at NASA. Future
research can advance the understanding of the
components of this model to achieve normative
assumptions, definitions, and standards that pro-
mote effective and efficient knowledge practices
that reduce complexity and accelerate learning to
achieve successful outcomes. Accordingly, the
following future research initiatives should
advance understanding and yield practical benefits
for project organizations:
1. What are the characteristics of Challenges and
Opportunities that achieve organizational
and individual commitment, align individual
and organizational agendas, and promote
effective PM?
2. How should organizations systematically address
talent development in terms of Abilities,
Attitudes, Assignments, and Alliances?
3. What are the metrics and measures that best
capture effectiveness and efficiency in the
Knowledge Processes and Outcomes of
Capturing and Retaining, Sharing and
Applying, and Discovering and Creating?
4. Can biases and heuristics that drive
Organizational and Societal Expectations be
identified and addressed to inform how organi-
zations can make better decisions and design
better measures for the Challenge/Opportunity,
the core Knowledge Processes, and Project
Outcomes?
5. What are the operational definitions and certi-
fication parameters of knowledge behaviors
for project practitioners and how does that
address talent development and capability
requirements?
6. How can the characteristics that make data and
information searchable and findable and result
in adaptable knowledge in a systems approach
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to organizational knowledge and learning be
operationalized to effective requirements and
behaviors?
7. What is the nature of the relationship between
KS, accelerated learning, and reducing
complexity?
In conclusion, there is much work and research
needed for addressing how organizations and prac-
titioners can best leverage project knowledge and
KS to get things done in the modern complex pro-
ject environment. The potential mitigating and com-
plicating variables that reduce the power of
knowledge and learning are too numerous to list,
but a descriptive model from an organizational sys-
tems perspective can serve as a framework to ensure
that the breadth of relevant components are identi-
fied and operationalized, as well as serving as a map
for future research toward informing a normative
project knowledge model.
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 CHAPTER

16
Change Management as an
Organizational and Project
Capability
JULIEN POLLACK

Introduction a business imperative, as it increases the chances

Organizational project management can generally
be considered to be the management of initiatives
that contribute to the achievement of strategic
objectives (Chia, 2013), involving the multilevel
integration of portfolio management, strategic
alignment, and governance issues (Aubry et al.,
2007). It has also been described as an integration
of project-related work throughout the hierarchy of
an organization (Drouin et al., 2016). It can be
argued that all projects involve an element of orga-
nizational change, as the larger organization
expands and contracts around an internal temporary
project organization. For example, Hornstein
(2015) commented that “. . . change is an inevitable
consequence of project implementations, and how
the change is ‘managed’ impacts how successful the
project will be” (p. 295). Söderlund (2010) identi-
fied that there are an increasing number of business
projects that involve some element of change.
Change is a fundamental part of organizational pro-
ject management, and although in some cases the
products of a project may be effectively distinct
from the delivering organization, this is rarely the
case in organizational project management.
Both project management and change manage-
ment have a role to play in the management and
delivery of organizational changes. Many authors
have identified the potential ways in which these
two management disciplines can potentially col-
laborate to deliver organizational changes
(Leybourne, 2006; Boddy & Macbeth, 2000;
Levasseur, 2010; Pádár et al., 2011; Winch
et al., 2012; PMI, 2013a). Parker et al. (2013)
have stated that using a project-based approach is
for the success of organizational changes, while
Hornstein (2015) has made a case for change
management to be a fundamental part of the
training of project managers, commenting that
“. . . they are complementary and mutually
supportive disciplines that contribute to the
successful implementation of a wide variety of
projects” (p. 295). It has also been identified that
“Rigorous change management practices are
essential for a standardized organizational project
management practice. . .” (PMI, 2013a, p. 1).
This suggests some need to integrate these
approaches.
Differences between the Disciplines
Although there are an increasing number of advo-
cates for greater unity between project management
and change management, they are traditionally
perceived as separate ways of delivering organiza-
tional changes. Practitioners are commonly asso-
ciated with one discipline or the other, with
a minority crossing this professional boundary.
Both of these disciplines are used to create change
in organizations, but “. . . 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).
This divide can be examined in terms of:
– the theoretical underpinnings that support the
disciplines;
– the heritage and capabilities of the practitioners
of these disciplines; and

236

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– the emphases that these disciplines bring to the
management and delivery of organizational
change.
The two fields are supported by significantly dif-
ferent academic literatures, and this has contributed
to the different world views that are associated with
proponents of these fields (Garfein & Sankaran,
2011; Lehmann, 2010), with some suggesting that
these roles should be managed by different people
in some cases (Crawford & Nahmias, 2010). Project
management, and later developments such as port-
folio management and program management, have
been strongly influenced by early developments in
the systems thinking movement, a branch of think-
ing that predominantly developed in the United
Kingdom following the Second World War.
In particular, Urli and Urli (2000) identified that
project management has been influenced by cyber-
netics. Morris (2002) has also stated that project
management has been influenced by techniques
from systems analysis and systems engineering.
All three of these systems approaches are examples
of hard systems thinking. Hard systems thinking is
a branch of the broader systems movement that
emphasized control, quantitative analysis, the
assumption that problem definition is not funda-
mentally problematic, and the tendency to perceive
problems as discrete from the broader environment
(Checkland & Holwell, 1998).
The early development of project management
has also been influenced by the industries in which
it was originally practiced, such as the aerospace
industry (Morris, 2013), and later widespread appli-
cation in construction. In these environments, pro-
blems are often of an engineering type, involving
quantifiable questions related to tangible product
and material performance. As a result of the clarity
that comes with more easily measurable outputs,
contracts are often signed with a minimum of mar-
gin, leading to a focus on delivery efficiencies.
The heritage of application in these industries has
influenced many project management tools and
techniques. Yeo (1993) identified that project man-
agement tends to specialize in quantitative tools that
can be used to control the quality, budget, and
schedule of the delivery of a product. Given the
considerable differences between the delivery of
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Change Management 237
an aircraft and delivery of a cultural transformation,
one might question whether the traditional form of
project management can provide a complete
response to organizational change.
Change management is a significantly younger
field than project management, and draws on
a substantially different intellectual heritage.
Crawford and Nahmias (2010) described the
influence of organizational development, strategy,
communication, and human relations in the
development of the field. Influential works include
those by Phillips (1983) and Connor (1993).
The field is arguably less clearly defined that pro-
ject management, and there is a wide assortment of
tools and techniques available to practitioners
(Mento et al., 2002). A more detailed discussion
of the development of change management as
a discipline has been conducted by Cao and
McHugh (2005). Change management has been
developed exclusively within the context of
creating change within organizations, focusing
on strategic alignment, developing and communi-
cating a vision, developing change ownership, and
engaging leadership in a change effort. Unlike the
focus on method and technique common in
much of the project management literature,
change management places a greater degree of
emphasis on the organizational dynamics experi-
enced during change (Lehmann, 2010). The field
arguably does not bring disciplinary baggage to
the practice of organizational project management
that is not directly relevant to an organizational
project management context.
At an interpersonal level, it has also been found
that different skills are needed in the practice of
change management and project management
(Alsene, 1998; Garfein & Sankaran, 2011). These
disciplines have been found to require different
competencies and skills (Crawford & Nahmias,
2010). Hornstein (2015, p. 295) has also identified
that their “. . . respective proponents arise out of
different parts of the organization and have different
functional and educational backgrounds.”
Practitioners of these two disciplines have found
that they have significantly different areas emphases
(Pollack & Algeo, 2014a, 2016), with project
management focusing on supplier, budget,
planning, resourcing, schedule, and risk-related
 238 Julien Pollack
issues. By contrast, change management was found
to focus on alignment, communication, reconciling
viewpoints, politics, and training. These different
areas of interest, the relatively small amount of
time that these disciplines have been working
together on organizational change projects, and
a lack of commonly accepted guidelines on how
these disciplines should cooperate, have contributed
to the different opinions that practitioners of these
disciplines hold regarding how they should relate to
each other (Pollack & Algeo, 2014b). Survey of
practitioner perspectives found that while project
managers tended to assume that change managers
should report to them, change managers worked
with the assumption that there should be an equal
and cooperative relationship between the disci-
plines. In addition, while project management was
seen as an operational activity, change management
was perceived as strategic. This is consistent with
the normative project management literature, with
PMI (2013a) implying that change management
functions should report to project or portfolio man-
agement (pp. 10, 61, 98).
In summary, project management and change
management appear to view the management of
organizational change projects significantly
differently. The disciplines have developed
based on significantly different intellectual heri-
tages, which have shaped their respective views on
what organizational change is, and how it should
be managed. Inevitably, this has translated
into practitioners of these disciplines working in
different ways, with disparate suites of tools and
techniques. The disciplines do not appear to share
a common perspective on each other’s role in the
delivery of organizational change projects, with
differences in opinion with regard to the reporting
relationship between the disciplines and their
respective contributions to different project stages
and activities.
However, there is also similarity and common
ground between the disciplines. Crawford (2011)
found that there are strong similarities between
the roles that change managers and project man-
agers play in organizations. This can partly be
explained through the common emphasis in the
disciplines on delivering specific, defined
changes, within a set time frame. In addition,
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there is some evidence that the fields are conver-
ging. For example, Urli and Urli’s (2000)
research found that there is an increasing empha-
sis in the project management literature on topics
that could be considered more typically indicative
of change management. Similar findings were
echoed in Pollack and Adler’s (2015) research.
There has been an increase in the emphasis that can
be seen in the project management literature on
topics such as teams, motivation, and leadership
(Kloppenborg & Opfer, 2002), and an increasing
emphasis on people over process (Leybourne,
2007). A shift is also apparent when specific topics
within project management are examined. For
example, Lehmann (2010) examined the ways
that communication was discussed in the project
management literature and found that there
was a growing convergence in how the literatures
discussed communication. The study by Pádár
et al. (2011) produced comparable results when
examining the ways in which stakeholder
roles are discussed in the respective literatures.
The publication of the Project Management
Institute’s Managing Change in Organizations:
A Practice Guide (PMI, 2013a), and the reissue
of the Project Management Body of Knowledge
(PMI, 2013b), which is arguably the world’s most
recognizable text on project management practice,
including a key knowledge area on stakeholder
management, suggest a further shift in the
discipline.
The intellectual convergence of the disciplines,
and the tendency for practitioners of both to be
singly, or jointly, given responsibility for the
delivery of organizational change projects, has
led to some crossover between them. Jarocki
(2011) described an “. . . obvious overlap
between the two disciplines . . .” leading to
a lack of clarity about the boundary between
them. Perhaps as a result of this lack of clarity
about the boundary and working relationship
between the disciplines, it has been identified
that “. . . there is evidence of a degree of rivalry
between Project Managers and Change Managers
concerning who should be managing business
change” (Crawford & Nahmias, 2010). Review
of the literature indicates that there is a lack of
consensus, and perhaps some conflict, regarding

the forms that cooperation between these disci-
plines should take (Jarocki, 2011).
The Need for Integration
Some level of integration between project manage-
ment and change management is necessary if orga-
nizational project management is going to consider
and address the whole organization during the con-
ception, initiation, delivery, and maintenance of any
organizational change. Project management and
change management each only respond to some of
the factors that are relevant to successful delivery.
The Project Management Institute has identified
that “Project management, in terms of simply focus-
ing on scope, time, and budget, is not sufficient for
managing the scale and rate of change that is the
norm in most organizations” (PMI, 2013a, p. 23).
Using either approach to the exclusion of the other
seems, not necessarily doomed to failure, but leaves
a greater proportion of success to chance than would
otherwise be the case.
The divide between these disciplines, and they
ways in which they can play a complementary role
will be discussed in terms of focus on:
• the project output versus the context the output
will occupy; and
• delivery to a goal versus a response to strategy.
Project management is fundamentally focused on
the product to be delivered. Although there is argu-
ment that some aspects of project management are
shifting toward a service-dominant logic (see
Sankaran & Agarwal, 2012), the majority of tools
and techniques used in traditional project manage-
ment start with the assumption that there is a clearly
definable product that will be the central output
of the project. If the product cannot be clearly
defined, then comprehensive deconstruction of
a product into work packages becomes problematic.
Early definition of project goals is typically seen as
a positive factor, and although Turner and Cochrane
identified as early as 1993 that projects with clear
goals and methods are only one of four types of
projects, the assumption of clear goals and methods,
commonly valid within an engineering-type envir-
onment, continues to pervade project management
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Change Management 239
thinking, even in contexts where the validity of the
assumption is legitimately open to question.
In project management, a reductionist perspective
presupposes that goals can be clearly defined.
The centrality of the tendency toward reductionism
can be seen in the pivotal role that work breakdown
structures play in the standard project management
process. The most commonly used scheduling
techniques are based on the breakdown of work
into smaller packages. Contracts for subcontractors
are often based on a work breakdown structure,
with the prime contractor playing an integrative
role. Accordingly, budgets are typically monitored
on a component-by-component basis. Testing and
commissioning processes progress from lower
levels in the breakdown structure, up the hierar-
chy, until properties can be tested that are only
present at the level of the whole system. Abstract
organizational qualities do not lend themselves to
breakdown, and a consequence of this focus on the
tangible product of a project is that the product can
be seen as an end in itself. The original need, which
the product was designed to satisfy, may become
lost during the development process. This is not an
issue if the success of the project remains contin-
gent on its ability to satisfy the original need, but it
is significantly simpler to assess a product’s com-
pliance to specification than a project’s satiation of
a need, and the latter may readily become lost.
Change management does not have a suite of
practitioner tools and techniques that are as uni-
versally accepted and consistently applied as pro-
ject management does. This makes discussion
of the norm in change management more open
to question. However, it is safe to say that
a reductionist definition of any products asso-
ciated with a change does not play a central role
in approaches to change management. The scope
of work of change is usually significantly different
to that of project management, focusing on
increasing support for a change, rather than
directly implementing the change. For example,
a common change management technique, the
change readiness survey, will provide information
about the current organizational climate, knowl-
edge, and acceptance of a change. It can be used to
highlight divisions in an organization where dis-
sent may be forming, or topics that have not
 240 Julien Pollack
received effective communication or training.
Change management focuses on developing sta-
keholder engagement and support, removing road-
blocks to change, and harnessing and aligning
leader support. The context is created in which
change can happen. This can be a very effective
approach, but it implies a different approach to
control. Change is not directed. The conditions
under which change can occur are created.
The embodiment of the actual change often relies
on the staff in the organization who are the subject
of the change initiative, rather than staff assigned
to a change management team.
The contrast is that while project management
focuses attention on delivery of the product, it
does not emphasize the context the product will
occupy. Change management emphasizes creating
the conditions under which change can occur, but
does not directly create the change. Contracting,
scheduling, budgeting, and delivery are not a core
focus of change management. Project manage-
ment might be used to efficiently deliver
a product, but without consideration for user
uptake. Change management might be used to
create a climate where change can occur, but
without management of the delivery or control of
the complicated outputs that might be needed to
create the change. Both approaches together could
be used to assist in efficient delivery and in accep-
tance and uptake.
The difference between the disciplines can also
be understood through reference to the roles they
traditionally play in the process, from initial
conception of an idea to organizational-benefits
realization. The project management life cycle
typically begins after the initial conception of
a project. The point at which a project manager
becomes involved varies, but it may be after the
goals are set, after specifications are defined, and
even after contracts have been awarded. At the
opposite end of the life cycle, although the length
of a project manager’s involvement with a project
varies, it typically concludes with, or soon after,
a product is accepted at practical completion.
The process of capturing the lessons that have
been learned on a project is often an afterthought,
given a fraction of the attention that consideration
for organizational learning would require.
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In addition, project evaluation typically occurs
at, or soon after, the product of the project has
been delivered. Projects are typically assessed in
terms of the iron triangle of the time taken to
completion, the cost of the project, and the quality
(or scope) of what has been produced.
These are important metrics, but should surely
take a subordinate position to consideration of
the contribution that the project has made to the
client’s and supplier’s organizational strategies
(Fahri et al., 2015). The contribution to strategy
is rarely assessable at completion. It may only be
assessable years after delivery when the impact of
a project on an organization can be understood.
However, long-term project impact assessments
appear to be rarely conducted. The focus of project
management is primarily on the delivery of
a unique and predetermined output. This results
in efficiencies in the project delivery process, but
little focus is typically given to how this connects
to broader organizational strategy.
Again, change management takes a different,
but complementary, approach. Change manage-
ment is also a goal-focused activity, but is typically
described as starting much earlier in the life-cycle of
a change. Texts on change management focus on
building a vision for the change that can be clearly
and effectively articulated. This may involve
moving from a vague and undefined position
to a clear expression of intention, but stops signifi-
cantly short of detailed definition. Expression at the
level of vision allows for greater alignment with
organizational strategy than detailed definition,
because of the shared level of abstraction. Change
management focuses on enabling change, helping
others in an organization move to another state,
rather than specifying or directly delivering
products that create the change. Alternatively,
change management may be coupled to the end of
a project management process as a way of increas-
ing uptake or transitioning to business as usual. PMI
(2013a, p. 27) describes this process as: “Change
management requires undertaking activities that
align projects and programs with the strategy of
the organization as well as activities that transition
project results into operations to realize benefits.”
A consequence of this approach is the maintenance
of clear links to strategy, but a lessened emphasis on

direct control over the actual products that are
developed to enable or create a change.
Project management and change management
have different foci, and this provides great
opportunities for complementarity. Project
management focuses on the product, while
change management focuses on the context in
which a change will take place. Together, they
can ensure that a product is delivered efficiently
and effectively, and that the climate and
context are ripe to receive it. Project manage-
ment focuses on delivery to predetermined
goals, while change management focuses on
the expression and communication of a vision
for change. Together, they could help to bridge
the divide between strategy and project goals, at
both the front- and back-end of projects. “Key
factors for successfully building a competitive
advantage with the strategy execution frame-
work of organizational project management are
embedded with change management” (PMI,
2013a, p. 23). However, obstacles stand in the
path of the complementary use of these
approaches. One obstacle relates to the way in
which change management is portrayed within
the project management normative literature.
Differing Perspectives on Change
Management
To understand how these two approaches can com-
plement each other, the remainder of this chapter
will first discuss how change management is repre-
sented in the project management literature,
and contrast this with how change management
represents itself. The chapter will then argue that
a reconceptualization of change management within
the project management literature is needed, if the
benefits of change management are to be realized
for organizational project management.
Change Management in Managing
Change in Organizations
The Project Management Institute’s Managing
Change in Organizations (2013a) is a substantial
work that has significantly contributed to the
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Change Management 241
awareness of change management within the project
management community. This guide presents
a summary of change management processes for
a project management audience. It is structured as
follows: it provides a broad overview of change
management, then separately discusses aspects of
change management that are relevant at the portfo-
lio, program, and project levels of an organization.
It describes change as follows:
. . . it [change] typically stems from strategic
objectives that are part of an overall organiza-
tional strategy and are set at the portfolio level.
Programs and stand-alone projects begin with the
formulation of the change and its planning;
change is then implemented through one or
more projects that produce tangible deliverables
(products, services, and results) for the business.
(PMI, 2013a, p. 29)
From this perspective, change management
occurs at all three of the portfolio, program, and
project levels. Change agendas may be created and
developed at the portfolio of projects level. Change
is then created in an organization through specific
projects, which produce outputs that are absorbed
back into the organization to become part of the new
stable process of business as usual.
Program management is also identified in this
guide as a key way that change management can
be used in organizations. PMI (2013a) comments
that the focus on stakeholder engagement, benefits
management, governance, and strategic alignment
in program management can be of assistance in
implementing change strategies. “Due to its cyclic
nature and its capability to address high ambiguity
and uncertainty in a structured way, program
management is ideally suited to deal with the
complexity of change management” (PMI, 2013a,
p. 65). The guide appears to be suggesting that of
portfolio, program, and project management, pro-
gram management is most comparable with change
management. Readers may be interested in contrast-
ing this with alternative perspectives on portfolio
management in Chapter 7 and program manage-
ment in Chapter 8 of this book.
PMI (2013a) provides some critical success fac-
tors that are applicable to a whole-of-organization
approach to change management, but there is little
 242 Julien Pollack
discussion of change management processes other
than in the context of portfolio, program, and
project management. The discussion of change
management in this guide is structured around
the Project Management Institute’s existing
guides: Standard For Portfolio Management;
Standard For Program Management; and
PMBOK Guide. As a result, this interpretation of
change management shares many of the emphases
present in these earlier publications. The guide
has a strong emphasis on process, particularly
focusing on documents that should be prepared
at various stages of an organizational change.
A hard systems thinking approach is also apparent
in the guide, particularly in the use of a repeated
discussion of the inputs to, and outputs of, pro-
cesses. Although the guide takes an interesting
approach in discussing change management in
the context of portfolio, program, and project
management, the imposition of this framework
seems to have been more limiting than illuminat-
ing. It reads as if the authors were trying to
incorporate change management, while making
a minimum of alterations to an established,
organizationally embedded, and socially accepted
hierarchy between portfolios, programs, and
projects.
Change Management in Leading Change
There is a broad selection of models and processes
for the management of organizational change
(Buchanan, 1993, p. 684; Pillay et al., 2012, p. 59;
Smith, 2011, p. 115; Sikorko, 2008, p. 307; Stewart
and Kringas, 2003, p. 676). Readers who are inter-
ested in a comprehensive comparison of these mod-
els are referred to Brisson-Banks (2010) and
Stewart and Kringas (2003). Of the many models
available, Kotter’s (1996) Leading Change is one of
the most widely recognized texts on change man-
agement. In this section, Kotter’s text is reviewed as
broadly representative of change management. It is
far from the only approach to change management,
but is arguably one of the most influential.
In addition, Kotter’s text has been chosen as repre-
sentative as it has adopted a process-based approach
to change. This is more comparable with the
approach to change management adopted by the
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Project Management Institute than many other
change models, such as the critical success factor
approach adopted by Hiatt’s (2006) ADKAR.
Kotter’s (1996) eight-stage process of creating
a major change has been recognized as one
of the most well-known approaches to organiza-
tional transformation (Mento et al., 2002, p. 45),
as the mainstream wisdom for leading change
(Nitta et al., 2009, p. 467), and the most
compelling formula for success in change
management (Phelan, 2005, p. 47). Kotter’s
model has gained significant popularity with
organizational leaders looking to implement
changes to their organizations (Brisson-Banks,
2010, p. 248). This approach to change “. . .
became an instantaneous success at the time it
was advocated and it remains a key reference in
the field of change management” (Appelbaum
et al., 2012, p. 765).
Kotter’s eight-stage process of creating a major
change is summarized as the follows in Leading
Change (1996) and his subsequent publications:
1. Establishing a sense of urgency
2. Creating the guiding coalition
3. Developing a vision and strategy
4. Communicating the change vision
5. Empowering broad-based change
6. Generating short-term wins
7. Consolidating gains and producing more
change
8. Anchoring new approaches in the culture
The eight-stage process describes a set of steps
that can be taken to implement a top-down man-
dated change in an organization (Day & Atkinson,
2004, p. 258; Choi et al., 2011, p. 12; Abraham
et al., 2002, p. 36). It has been described “. . . as
a vision for the change process” (Mento et al.,
2002, p. 45), that emphasizes the role of leader-
ship in the change process (Choi et al., 2011,
p. 12; Raineri, 2011; Pillay et al., 2012, p. 61).
This approach to change has been described as
typical of private sector change models (Stewart &
Kringas, 2003), and one that focuses on the culture
of an organization (Casey et al., 2012, p. 112).
There is broad support for the efficacy of the
process in the literature (e.g., Cegielski et al.,
2006, p. 311; Ansari & Bell 2009, p. 160).

Several case studies can be found in the literature
of changes that have been managed using Kotter’s
process (e.g., Ansari & Bell, 2009; Day &
Atkinson, 2004; Joffe & Glynn, 2002;
Lintukangas et al., 2009; Pollack & Pollack,
2015; Springer et al., 2012), and the process has
frequently been used as a framework for post hoc
analysis of why changes have, or have not, been
successful (e.g., Casey et al., 2012; Goede, 2011;
Gupta, 2011; Nitta et al., 2009; Sikorko, 2008;
Smith, 2011; Yauch & Steudel, 2002).
A review of Kotter’s process shows no clear
divisions between the aspects which relate to the
portfolio, program, and portfolio levels of an
organization. Kotter’s process is a whole-of-
organization approach to change management –
a single process that can be used to guide change,
rather than a set of different processes at separate
organizational levels. Research has suggested
that this process can be used in an iterative
way, replicating the process with different man-
agement and stakeholder groups throughout an
organization, but the process remains broadly
unchanged at different levels of the organization
(Pollack & Pollack, 2015). This is a significantly
different approach to change management to that
presented in PMI (2013a).
In Kotter’s model, a vision is created, groups
are formed to lead and represent the change,
key messages are communicated, successes are
reinforced, obstacles are removed, and effort
is invested into embedding and sustaining
the change process. The model is applicable
to small management groups, whole-of-
organization initiatives, or to iterative applica-
tion cascading throughout an organization.
Comments within PMI’s guide to change man-
agement suggest that it was intended that their
model for change management should be
a whole-of-organization response. “The change
process spans all levels of a business . . .” (PMI,
2013a, p. 29). However, their discussion of
change management remains limited to the
hierarchical separation between portfolios, pro-
grams, and projects, with different processes and
activities mandated at each level, focusing on
a cascading system of control throughout the
organizational hierarchy.
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Change Management 243
Fitting Change into a Project
Management Mould
A central issue associated with trying to fit change
management into a structure predetermined by pro-
ject management has to do with compatibility
between the paradigms that have informed these
two disciplines. Control at a micro level, delivery
to a predetermined and detailed plan, and minimiza-
tion of variation, are key themes within project
management. This emphasis on control is barely
present in change management. Control is only
exercised at a macrolevel in leader-led approaches
like the Kotter process and is almost entirely absent
in approaches that take an emergent or consensual
approach to change. This fundamental difference
between the approaches suggests that there is
a degree of paradigmatic incommensurability
between the disciplines.
This difference is acknowledged in PMI (2013a,
p. 11). This guide comments that “Project manage-
ment tools such as change control processes for
adjusting scope or requirements are not sufficient
to address the types of change needed” (PMI, 2013,
p. 11). As mentioned above, hard systems thinking
has influenced the development of project manage-
ment. Beeson and Davies (2000, pp. 178–179) have
noted that systems theories and cybernetics models
both emphasize the maintenance of order, and
where change is allowed, it occurs as small adjust-
ments that are allowed as they increase or stabilize
a larger order of control. These approaches “. . .
have generally given an impoverished account of
change” (p. 178).
The text of PMI (2013a, p. 11) can be taken as
implying that some project managers may not be
comfortable with the levels of ambiguity found in
organizational change. The techniques of traditional
project management are not designed for high levels
of ambiguity, and thus the training that many project
managers receive is less likely to prepare them for
such situations. Project managers are typically
trained to work within the hard systems thinking
paradigm. Being able to move comfortably between
a traditional project management paradigm and one
that takes a fundamentally different view of the
virtue of control would involve a level of pluralism
that many practitioners would find difficult to
 244 Julien Pollack
achieve. Psychologically, barriers to adoption
relate, in various ways, to the “. . . problems of an
individual agent moving easily from one paradigm
to another” (Mingers, 1997a, p. 13). The adoption of
pluralist practice is heavily influenced by
a practitioner’s previous experience (Brocklesby,
1997, p. 203; Mingers & Brocklesby, 1997,
p. 507; Munro & Mingers, 2002, p. 369), and their
beliefs and values (Mingers & Brocklesby, 1997,
p. 499). Correspondences have also been identified
between personality types and the approaches
developed within the different paradigms (Mingers
& Brocklesby, 1997, p. 500; Mingers, 2003, p. 246).
Pluralist practice is also dependent upon the specific
abilities of the practitioner. (Mingers, 1997b,
p. 416), and requires “. . . comfort with several
styles of engagement” (Mingers, 2003, p. 246).
A manager may be required to assume different
roles or guises, associated with different paradigms
(White & Taket, 1997, p. 392), and not all managers
have this level of psychological flexibility. Insights
cannot necessarily be transferred easily between
approaches from different paradigms
(Wolstenholme, 1999, p. 424) because of the differ-
ent epistemologies involved. Knowing and operat-
ing within a paradigm requires that the manager
becomes bodily involved in the paradigm through
experience and practice (Mingers & Brocklesby,
1997, p. 501), a process which “. . . may be said to
require both a learning and an unlearning”
(Brocklesby, 1997, p. 209 – original italics).
Changing the basic assumptions of what one con-
siders to be knowledge and how one constructs
premises concerning the status of reality is no sim-
ple feat, something which, “. . . although manifestly
possible, is not often achieved in practice” (Burrell
& Morgan, 1979, pp. 24–25).
Change management is more than a set of tools to
supplement the existing portfolio, program, and
project management suite. It entails a significantly
different mindset. To apply change management
tools with a project management mindset risks los-
ing many of the advantages that change manage-
ment could otherwise provide. To use Reed’s (1985,
p. 174) terminology, using change management, but
maintaining project management’s emphasis on
control and deviation minimization would entail
a form of imperialism that would mean that many
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of the benefits of the second paradigmatic perspec-
tive would be lost. However, it is just this way
of combining project management with change
management that is suggested by PMI (2013a).
The approach to change management implied
by PMI (2013a) is represented on the left side of
Figure 16.1. In this model, there is a simple hier-
archical progression from strategic management
to portfolio management processes. The parts of
change management that are relevant to portfolio
management help at this level of the organization.
Portfolio decisions are then passed down to pro-
gram management processes, and the parts of
change management that are relevant to program
management help at this level of an organization.
A similar process happens at the project level,
before the results of the project are handed over
to operations. A significant issue with this
approach is that only those aspects of change
management that align with a particular level of
portfolio, program, or project management are
applied at each of these levels. However, change
management, as discussed in the change manage-
ment literature, makes little reference to the levels
of portfolio, program, or project management.
Change management is one activity, used to man-
age the delivery of organizational change across
the whole of an organization. It can, and is, used
to deliver change projects without reference to
portfolio, program, or project management.
Restructuring it to suit a portfolio, program, and
project management framework distorts its intent,
and arguably reduces its efficacy. PMI (2013a)
provides a useful framework for introducing
change management into organizations with
a mature approach to portfolio, program, and pro-
ject management, but is simultaneously restrictive
in how change management is described.
The right side of Figure 16.1 provides
a fundamentally different approach to that sug-
gested by PMI (2013a). In this model, the organiza-
tion maintains a mature hierarchy – from strategy, to
portfolio, to program, to project management – with
outputs of organizational project management
taken up by operations. Change management sits
alongside these areas, working with them to achieve
shared organizational project management objec-
tives. Change management will take direction

Strategic
Management
Project Portfolio
Management & CM
Change Management
Program
Management & CM
Project
Management & CM
Operations
Figure 16.1. Models of the relationship between project management and change management.
from senior leaders about organizational objectives,
but will also work with them to develop and com-
municate the vision for change, form and coordinate
guiding coalitions, and set the context for change.
Change managers will work with project and
program delivery to communicate early wins and
build momentum around a change. They will also
work with operations to make sure that the context
in which a change will be created is ripe to receive
it. Some of this activity may involve building
awareness and removing barriers to adoption or
uptake, or empowering actions that support the
change. Some might involve lower levels of an
organization, such as users of project outputs,
but it could equally involve work with senior
management to make sure that organizational com-
munication, senior management behavior, and orga-
nizational structural mechanisms are consistent
with the change intent. A simple hierarchical pro-
gression from the top of an organization down is not
consistent with change management. For a change
manager to be effective, they must operate at
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Change Management 245
Strategic
Management
Project Portfolio
Management
Program
Management
Project
Management
Operations
a variety of different organizational levels at once.
Many practitioners will not be comfortable operat-
ing from a traditional project management perspec-
tive and a change management perspective at once,
and it is suggested that in many cases a joint project
management and change management response to
organizational project management will require
separate specialists, each taking responsibility for
the change.
Conclusion
In this chapter, it has been argued that effective
organizational project management needs to find
a balance between project management and change
management. Each of these approaches can be used
to deliver organizational change projects indepen-
dent of the other. However, using one to the exclu-
sion of the other risks losing opportunities that
a combined approach could provide. It was argued
that although project management and change
 246 Julien Pollack
management are based on significantly different
intellectual heritages, and are supported by different
techniques, they provide complementary perspec-
tives that can be of benefit in providing a more
effective response to the challenges of organiza-
tional project management.
Project management and change management
share macrolevel goals; namely, the achievement
of specific, unique organizational goals, within
time constraints. However, they interpret the best
actions to take to achieve these objectives in sig-
nificantly different ways. Project management
assumes that goal definition is both unproblematic
and usually substantially complete before the pro-
ject starts, then takes a microlevel perspective on
control and minimization of deviation from objec-
tives. Change management acknowledges the con-
tested nature of organizational objectives, and
places significantly less emphasis on defining, and
controlling subsequent delivery to, a plan for action.
The focus is instead on communicating the change,
developing support, and removing obstacles that
would inhibit the change.
In this chapter, it was also argued that there
is a conflict between how change management is
represented in the Project Management Institute’s
Managing Change in Organizations (PMI, 2013a)
and how change management is represented by
disciplinary experts in the field. PMI (2013a) is
an important text because it raises the awareness
of change management within the project manage-
ment community. In addition, it acknowledges
the strategic role of change management.
However, superimposing change management
onto a portfolio, program, and project manage-
ment framework risks diluting some of the exist-
ing strengths of change management. It risks
representing change management as an optional
extra to established portfolio, program, and
project management approaches. In addition, this
representation could be considered a kind of
imperialism, imposing a hard systems thinking
paradigm on change management, that is, a tactic
for combining the approaches that would result
in the loss of benefits to be found in the more
emergent, context-focused emphases that change
management provides.
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 CHAPTER
17
The Behavioral “Glue” in OPM
A Review of Productive Behaviors of Project
Team Members
TIMO BRAUN
Introduction
Research in project management has a long tradi-
tion of studying the competencies and leadership
styles of the project manager – in the belief that
project success is to a large extent manageable by
a single individual, often described as being
almost heroic (Loufrani-Fedida & Missonier,
2015). Research in related disciplines such as
leadership and entrepreneurship suggests that
organizational processes and effectiveness are
strongly influenced by more distributed pro-
cesses, e.g. collective behavior and practice
(Bolden, 2011). That means that the importance
of productive behavior of “regular” team mem-
bers as individuals, as well as project-related
practices performed at the team level, are often
overseen or underestimated. This is particularly
true for organizing which blurs organizational
boundaries and also disrupts organizational hier-
archies, as is regularly the case in interorganiza-
tional projects involving the participation of many
individual employees from different organiza-
tions (Grimshaw, Marchington, Rubery, &
Willmott, 2005). In such a constellation, project
partners rely on the engagement and cooperative-
ness of others. For the sake of project success, in
many situations project members need to work
beyond their contractual obligations or the
requirements of their job descriptions, and are
thus not considered in the remuneration systems.
Nonetheless, behavior of this nature ultimately
makes a project work or fail (e.g., in terms of
delays, extra costs or poor quality). The typical
kind of behavior that promotes productivity is, for
example, being generally helpful and showing
250
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a sense of loyalty, fairness and initiative
(Braun, Müller-Seitz, & Sydow, 2012). Against
this background, the current chapter aims to pro-
vide a review of studies that explore the beha-
vioral “glue” in OPM. I use the “glue” metaphor
because previous research suggests that this kind
of “extra role” behavior may only have a small
effect on performance measures, but certainly
has a much greater effect on organizational func-
tioning; i.e., it holds organizations together
and prevents business interruptions (Podsakoff,
MacKenzie, Paine, & Bachrach, 2000). More spe-
cifically, three research streams on productive
behavioral patterns in project teams have been
identified: (1) sharing, (2) improvising, and
(3) extra-productive behavior. The aim of this study
is to provide a systematic overview of these three
patterns, focusing on the distinctive characteristics
of productive behavior in a project setting as well as
their antecedents and consequences. At the same
time, this overview serves as a knowledge base and
guide for future research agenda.
The chapter is structured as follows: In the next
section, the behavioral underpinnings of project-
based work (as opposed to a widespread technical
perspective on project management) are set forth
while pointing to their relevance for project perfor-
mance. Thereafter, the method of the bibliographic
search is briefly presented. The results of the biblio-
graphic analysis are presented in the subsequent
section, providing an overview of recent research
that addresses the characteristics, antecedents
and consequences of sharing, improvising and
extra-productive behavior. Finally, based on the
bibliographic analysis, an agenda for future
research is developed.

The Human Side of Projects: Why
Behavior Matters for Project Performance
The ubiquity of project management and ongoing
“projectification” (Midler, 1995) of organizations
does not generally mean that project-based work,
project teams, and the ways organizations make use
of projects are well understood (Chiocchio,
Kelloway, & Hobbs, eds., 2015). And despite the
fact that project management research and practice
aim at providing guidance to enable the execution
and completion of successful projects, an alar-
mingly high percentage of projects overshoots
deadlines and budgets or fails (Sage, Dainty, &
Brookes, 2014).
One major reason for our lack of understanding is
the fact that projects are mostly managed as techni-
cal processes rather than as behavioral systems.
Even though researchers in the field of project man-
agement have become interested in factors that may
affect project management performance, their
efforts fall short of addressing the “human side.”
In many cases, project management scholars have
mainly technical or business backgrounds, yet they
are largely unaware of recent findings in work and
organizational psychology. Even industrial psy-
chologists who analyze groups and teams tend to
ignore contextual influences such as the project size
or type, the underlying organizational structure, and
the characteristics of the industry – all of which
may have an influence on human behavior and,
ultimately, on how a project unfolds (Chiocchio
et al., eds., 2015).
In recent years, however, project management
research as well as practice (see current versions
of the PMBOK Guide by PMI or the IPMA
Competence Baseline) increasingly consider beha-
vioral issues. Stevenson and Starkweather (2010),
for example, identified six critical competencies in
the behavior of project managers: Their leadership
style, the ability to communicate at many levels,
verbal skills, written skills, attitude, and the ability
to deal with ambiguity and change. What is more,
there is a tendency toward focusing increasingly on
“softer” behavior and skills which may help to deal
with high complexity in projects. Most of this
research, however, addresses the role of the project
manager (for an overview, see Turner and Müller,
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The Behavioral “Glue” in OPM 251
2005) and not the behavior of other team members,
or distributed practices at the group level (Loufrani-
Fedida & Missonier, 2015). Previous studies have
reported effects of team behavior, such as interac-
tion and collaboration skills, on project perfor-
mance (Jha & Iyer, 2007; Melkonian & Picq,
2010, 2011; Ruuska & Teigland, 2009). Thus, suc-
cessful projects are those that utilize collective com-
petence (Ruuska & Teigland, 2009; Ruuska &
Vartiainen, 2003). Recently, Müller, Vaagaasar,
Nikolova, Sankaran, and Drouin (2015) go one
step further and outline a sociocognitive space,
where the vertical leadership of a project manager
relates to distributed, i.e. horizontal forms of leader-
ship. For different perspectives on leadership in
projects, please also see Chapter 14. Taken together,
the behavioral side of projects, specifically the
behavioral pattern of project team members which
might be as important as the leadership role of the
project manager, deserves more attention from pro-
ject management researchers. In the following sec-
tions of this chapter, these behavioral patterns will
therefore be further investigated.
Bibliographic Search Method
The search was guided by the objective to find
research articles which (1) focus on highly pro-
ductive behavior of project team members and
which (2) seriously regard project-based organiza-
tions to be an important factor for determining
their behavior. The latter is often not the case in
research in the domain of general organizational
behavior. Thus, as a first step, research articles
published in the International Journal of Project
Management and Project Management Journal
from 2006 to 2016) and dealing with the issue of
productive behavior (i.e., performed voluntarily/
going beyond contractual requirements/promoting
organizational functioning) in project-based
organizations were systematically screened.
In this initial search, it emerged that productive
behavior occurs predominantly along three
lines: (1) sharing, (2) improvising, and (3) extra-
productive patterns. Based on this insight,
the search was continued by focusing on double-
blind peer-reviewed articles in English journals
 252 Timo Braun

Table 17.1 Publications with a Focus on Productive spontaneity (George & Jones, 1997), contextual
Behavior in Projects, 2006–2016 performance (Borman & Motowidlo, 1993), and
Journal Number of Articles organizational citizenship behavior (OCB)
(Organ, Podsakoff, & MacKenzie, 2006) have
International Journal of Project 14
Management
been developed to describe and explain this type
of behavior. For example, OCB tends to have
Project Management Journal 2
a positive impact on a collective level. Bolino,
Journal of Construction Engineering 2
Turnley, and Bloodgood (2002) propose that OCB
and Management
can enhance social capital in organizations – in
Research Policy 1
a structural dimension, by establishing and config-
Journal of Change Management 1 uring network ties; in a relational dimension, by
Scandinavian Journal of Management 1 elevating mutual liking, trusting and identifying;
International Journal of Human 1 and in a cognitive dimension, by supporting
Resources Management a shared language or adding shared narratives.
Journal of Product Innovation 1 Even though most of the research on productive
Management behavior focuses on individuals, additional levels
International Journal of Operations & 1 have been taken into consideration. For example,
Production Management the team and organizational unit level have
Journal of Information Science 1 been examined (see e.g., Ehrhart, Bliese, &
Thomas, 2006; Pearce & Herbik, 2004). However,
the organizational context of these studies,
from the database EBSCOhost (http://search particularly project-based work, is not part of the
.ebscohost.com). This is a common bibliographic investigation (for the specific features of project
search strategy to allow for the emergence of teams, see Chapter 15). Other studies have
unexpected matches from a diverse set of journals, accounted for the interorganizational dimension of
and from other scientific disciplines (e.g., Müller- organizing; however, yet again the project-based
Seitz, 2012). As key words, “sharing,” “improvis- character (e.g., time-boundedness and termination)
ing,” and “extra-productive” were separately has not been considered (Autry, Skinner, & Lamb,
combined with “project.” As for the term 2008).
extra-productive which is less established than Looking at the research in project management,
the other two terms, synonyms were applied as there have been a number of studies in recent years
well (e.g., “citizenship behavior” or “extra-role which seem to investigate the “behavioral glue”
behavior”). Finally, the snowball technique was involved in projects and they are inspired by several
used to identify additional references that academic disciplines and subdisciplines including
appeared to match the research interest. This organization theory, organizational psychology,
search produced twenty-five relevant publications innovation management, etc.
(see Table 17.1). An initial screening of the twenty-five articles
produced three piles of publications with specific
foci on individual behavior, namely (1) sharing
Types of Productive Behavior behavior, (2) improvising behavior, and (3) extra-
productive behavior. In the following section, these
Productive behavior in line organizations that articles are reviewed and the nature of these beha-
goes beyond the expectations of the employer has vioral traits is assessed.
been a major stream of research in work and
organizational psychology in the past. Various
1 Sharing Behavior
theoretical constructs such as extra-role behavior
(Van Dyne, Graham, & Dienesch, 1994), prosocial Project-based work is characterized as a team effort,
behavior (Brief & Motowidlo, 1986), organizational often interdisciplinary and more often than not even

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reaching across organizational boundaries. In such
a context, project success heavily depends on the
willingness of team members to share – meaning
that project members provide necessary informa-
tion, knowledge or material resources to partners,
even though there is no contractual obligation to do
so. Sharing behavior, especially related to knowl-
edge, is often essential in order fulfill the project
objectives and to meet the expectations of the pro-
ject sponsors. Knowledge appears to be a critical
component in sharing practices, since knowledge is
an important organizational resource that may lead
to sustainable competitive advantages (for an
overview, see Wang & Noe, 2010). Moreover,
knowledge sharing is a mechanism by which
employees contribute to knowledge application,
innovation, and competitiveness (Jackson,
Chuang, Harden, Jiang, & Joseph, 2006). The
acquisition and preservation of knowledge is parti-
cularly important in a project environment since
projects have an institutionalized termination and
thus there is a need to transfer knowledge to
other projects (cross-project learning), to the parent
organization (project-to-organization learning) or
to a project network (Brady & Davies, 2004;
Söderlund, 2008, see also Chapter 19). In fact,
projects are “powerful generators of new knowl-
edge” (Wiewiora et al., 2014, p. 48) for both the
parent organization (Söderlund & Tell, 2011) and
for parallel or future projects (Fong, 2008).
Knowledge and insights from project work are
valuable because projects are more often than not
characterized by complex and nonrepetitive tasks
(Lundin & Söderholm, 1995). Thus, they often
comprise unexpected practices, unique actions,
and creative problem solving in a world of threat
(see Chapter 16).
Thirteen studies were found, published in the past
ten years, that explore the nature of sharing behavior
in OPM (see Table 17.2). Therein, various methods
such as conceptual reasoning, large-scale quantita-
tive studies, case studies, and expert interviews were
applied in a range of sectors including the construc-
tion industry, the oil and gas industry, and consult-
ing and business services (see Table 17.2). These
studies have a behavioral focus which is predomi-
nantly assessed at the level of project teams instead
of at the individual level. Exceptions are
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The Behavioral “Glue” in OPM 253
Hartmann and Dorée (2015), Nesheim and
Hunskaar (2015) and Wiewiora, Murphy,
Trigunarsyah, and Brown (2014). A broad variety
of theoretical lenses is used in these studies
which, among others, are concepts of organizational
culture (Adenfelt, 2010; Adenfelt & Lagerström,
2006; Hartmann & Dorée, 2015; Müller, 2015;
Wiewiora et al., 2014), individual or team conditions
such as self-esteem (Ding, Ng, & Li, 2014;
Koskinen, Pihlanto, & Vanharanta, 2003), practices
or mechanisms of sharing (Bosch-Sijtsema &
Henriksson, 2014; Müller, 2015; Nesheim &
Hunskaar, 2015) and contextual conditions such as
complexity or contingencies (Park & Lee, 2014;
Ruuska & Vartiainen, 2005; Wang & Ko, 2012;
Zhang, He, & Zhou, 2013). Another remarkable
difference in these studies is the scope of sharing.
While the majority of studies focus on sharing
mechanisms within the boundaries of projects
and/or of organizations, a considerable number
of studies deals with the interproject and interorga-
nizational dimensions of sharing. Hartmann and
Dorée (2015), for example, conceptualize cross-
project learning as a social activity embedded in
organizational and cultural context. Thereby,
project-overarching ambitions and trajectories are
found to serve as an important context
binder. Müller (2015) also focuses on the role of
cultural characteristics and how they shape
mechanisms and informal practices of knowledge
sharing. Nesheim and Hunskaar (2015) focus their
analysis on a specific example where interorganiza-
tional collaboration is part of the daily routine;
namely, the relationship between internal employ-
ees and external consultants. They argue that the
perception of in-group and out-group membership
has an impact on knowledge sharing. Ruuska
and Vartiainen (2005) assess knowledge sharing
communities in project organizations which are
semiformal social structures that often cut through
single projects. Finally, Zhang et al. (2013) inves-
tigate the construction industry and find that
knowledge sharing is associated with flexibility
and dynamic capabilities. Integrated project
delivery, an approach where architects, general
contractors and owners work collaboratively from
the early stages of a project, serves as an example
for this claim.
Table 17.2 Reviewed Studies on Sharing Behavior

Behavior Study Focus Theoretical Foundations Organizational Level of Analysis Method

Sharing Adenfel t 2010 Effect of knowledge sharing on Knowledge sharing Transnational project team Single case smdy of
behavior petformance in transnational projects a transnational project

Adenfel t, Conditions that enable knowledge Organizational culmre as Transnational project team Single case smdy of
Lagerstrom sharing in transnational proj ects antecedent of knowledge sharing a transnational project
2006

Bosch·Sijtsema, Quality and quantity of interactions in Practice based, interaction view Project teams 31 interviews in oil and gas
Hemiksson 2014 project team meetings on knowledge transfer industry, visualization of
interaction patterns in meetings

Ding et al. 2014 The role of team· based self·esteem and Two research streams: trust/ Project teams 203 smveys from architechual
team identification for trust and knowledge sharing and team finns; struchual equation
knowledge sharing identification/team self·esteem modeling, parallel mediation

Hartmann, The role of contextual influences of Learning as a social activity futerproject learning based on Multiple-case smdy of
Doree 2015 cross· project learning embedded in historical, immediate practices by construction finns
organizational and culhual individuals
context

Koskinen et al. Project simations which stimulate the The holistic concept of man, Project work Concepmal
2003 sharing of tacit knowledge cognitivist vs. autopoietic
epistemology

Muller 2015 Mechanisms for knowledge sharing Fonnal mechanisms and informal Project teams Case smdy
across project bOlmdaries and the role of practices for knowledge sharing
culhual characteristics

Nesheim, Knowledge sharing between employees fu·group vs. out· group theory fudividuals: employees and Empirical study of 117 employees
Hllllskaar 2015 and external consultants external consultants and consultants

Park, Lee 2014 The role of dependence and trust for Environmental complexity, Project team members Partial least square analyses,
knowledge sharing in IT projects domain expertise, similarity of data from 135 project teams in
proj ect value, communication two IT firms
frequency

Ruuska, Knowledge sharing communities in Communities as semifonnal Multiplemembership of Analysis of eight commllllities
Vartiainen 2005 project organizations social structmes individuals in communities in three project organizations

Wang, Ko 2012 Knowledge sharing mechanisms Contingency theory New project development teams In·depth case of project teams
(communities of practice, in two organizations
documentation, mentoring systems) and
how they are influenced by contingency
factors

Wiewiora et al. Effect of trustworthiness and Competing values framework Culhue at the project Multicase smdy
2014 organizational cultme on inter·project management unit level, behavior
knowledge sharing at the individual level

Zhang et al. Knowledge sharing as an antecedent of futegrated project delivery, futerorganizational project Case smdy of construction
2013 team flexibility dynamic capabilities project; social network analysis
 256 Timo Braun

2 Improvising Behavior implementation effectiveness (e.g., Leybourne &

Sadler-Smith, 2006).
The research stream on improvising behavior tracks
As for the domain of improvising behavior in
back to the longstanding dilemma of whether
projects, six influential studies identified that were
managerial action is more effective if it is based
published in the last ten years (see Table 17.3).
on analytical rather than intuitive judgments.
These studies are very diverse regarding the meth-
The latter is frequently the case, as managers more
ods applied (qualitative and quantitative empirical
often than not make decisions in rather loosely
studies) as well as the investigated level (indivi-
structured situations with limited information; i.e.,
duals and teams). As for the theoretical back-
with a high level of uncertainty or when time is
ground of these studies, it appears to be more
restricted. In such a context, the individuals are
homogeneous than that on the above-mentioned
required to utilize their intuitive decision-making
issues of sharing. For example, the research
skills as well as their improvisatory capabilities
stream on improvisation draws from research on
(Leybourne & Sadler-Smith, 2006).
flexibility and intuition. Unlike the other two types
There has been a growing interest in how impro-
of productive behavior, improvising has been pre-
visation is used within organizations (Chelariu,
dominantly investigated within isolated projects;
Johnston, & Young, 2002). Originally, improvisa-
e.g., projects in the UK financial sector (Gallo &
tion was acknowledged as a phenomenon in the
Gardiner, 2007; Leybourne, 2006), new product
context of jazz music and in theatrical plays, from
development projects (Gross, 2014; Magni,
where it was transferred to organizational contexts
Maruping, Hoegl, & Proserpio, 2013), or distinc-
(Pina e Cunha, Vieira da Cunha, & Kamoche,
tive projects in various sectors (Leybourne and
1999). With an increasing scholarly interest in the
Sadler-Smith, 2006). However, there are two stu-
temporal dimension of improvisation, the stage was
dies which contain cross-project aspects: the study
set to bring improvisation into project-based orga-
by Magni et al. (2013) investigates how dispersed
nizations. Improvisation is intertwined with aspects
IT project teams collaborate by means of impro-
of time, in particular regarding the pressure to com-
visation. They find that a higher degree of freedom
ply with a dense timetable. Even though projects are
enables improvisation. However, if team disper-
guided by the “iron triangle” of time, cost, and
sion is too extensive, this link may be attenuated.
quality targets, the temporal dimension of project
Magni, Proserpio, Hoegl, and Provera (2009)
delivery seems to be subjected to the highest level
show that the integration and cohesion of teams
of scrutiny (Leybourne, 2006). Improvisation
are important antecedents of individual improvis-
combines creativity, intuition, and bricolage.
ing behavior.
In a project environment, this includes moving
away from a project plan in order to enhance the
3 Extra-Productive Behavior
quality of project work or, and in particular,
to accelerate the implementation of actions Extra-productive behavior describes behavioral pat-
(Moorman & Miner, 1998; Pina e Cunha et al., terns which are not part of the work contract or the
1999). Improvising behavior does, however, need job description of employees, but which go beyond
some structured framework within which it can the expected performances. The differentiation
unfold. It is not realistic to expect employees to between in-role behavior, which is based upon for-
improvise effectively without any degree of control. mal contracts, job descriptions, etc. and extra-role
Still, improvisation is increasingly seen as a means behavior, which goes beyond that, is sometimes
of fulfilling tasks within organizations, especially in quite difficult, as the two phenomena are not always
new product development, implementation of mutually exclusive. Still, extra-productive behavior
corporate strategy, and the design of new processes does not have an immediate positive or negative
or routines. These tasks are often carried out effect (e.g., it is not subject to the formal reward
by projects and/or through the use of project system of the organization). In addition, such beha-
management techniques in order to improve vior occurs on a voluntary basis (e.g., the employee

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Table 17.3 Reviewed Studies on Extra-Productive and Improvising Behaviors

Organizational Level of
Behavior Study Focus Theoretical Foundations Analysis Method

Extra-productive Aibinu et al. Perceived fairness as an antecedent of Social exchange theory/reciprocity Organizational level Data on 41 projects in Singapore,
behavior 2008 cooperativeness in claim and procedural fairness (subcontractor structural modeling
management processes relationships)
Braun et al. 2013 How cooperative behavior affects Organizational citizenship behavior Individuals Cross-sectional, quantitative
project success and long-term study of 247 project managers
cooperation beyond single projects and workers
Braun et al. 2012 Adaptation of the OCB context to Organizational citizenship behavior Individuals Cross-sectional, qualitative study
projects and project networks (i.e.
project and network citizenship
behavior)
Ekrot et al. 2016 Organization-based self-esteem and Self-consistency theory; voice Individuals 618 project managers and 154
affective commitment as behavior; affective commitment portfolio coordinators; moderated
antecedences of voice behavior hierarchical regression analysis
Ferreira et al. The link of citizenship behavior and Organizational citizenship behavior; Individuals Project managers from Germany
2013 project performance varies according cultural clusters (n = 119) and Portugal (n = 128);
to the cultural context structural equation modeling
Kissi et al. 2013 How transformational leadership of Transformational leadership; Individuals 112 project managers in a UK
portfolio managers enhances project innovation climate and championing project-based organization
performance
Improvising Gallo, Gardiner Acceptance of a flexible PM Improvisation and flexibility Sectoral characteristics Qualitative interviews with
behavior 2007 approach including improvisation and individual behavior representatives from three
based on sectoral characteristics organizations of the UK financial
service sector
Gross 2014 Effective and efficient use of Improvisation in new product Individuals and new 183 surveys filled by middle and
improvisation in the case of complex development product development top managers of large enterprises
and familiar projects or in the case of teams
many unplanned changes in the phase
of production launch
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Table 17.3 (cont.)

Organizational Level of
Behavior Study Focus Theoretical Foundations Analysis Method

Leybourne 2006 Tensions between the “plan then Foundations of improvisation and Individual and team Qualitative study of six
implement” project management support for improvisation improvisation organizations
paradigm and improvisation
Leybourne, The role of intuition and experience Intuition and improvisation Individuals 163 members of the UK
Sadler-Smith on improvisation and performance association of project
2006 management; mediated multiple
regression analyses
Magni et al. How the effect of team improvisation Team improvisation, new product Teams 299 surveys on 71 IT projects
2013 on performance is influenced by development teams
structurally/psychologically
dispersed teams
Magni et al. How team behavioral integration and Multi-level approach to team Team-level processes 138 team leaders and members
2009 team cohesion positively affect processes and improvisation affecting individual belonging to 38 information
individual improvisation improvisation system development teams;
hierarchical linear modeling

has the choice to behave one way or another).
Finally, extra-productive behavior, especially citi-
zenship behavior, promotes the functioning of orga-
nizations (Braun et al., 2012; Organ et al., 2006).
Functioning means that processes can be performed
more smoothly, without disturbance and with less
hassle, yet scholars argue about whether or not this
also has an effect on performance or productivity
measures (Braun, Ferreira, & Sydow, 2013; Organ
et al., 2006).
As for the domain of extra-productive behavior in
projects, the bibliographic search found six studies
that were published in the past ten years (see
Table 17.3). With the exception of Aibinu, Ofori,
and Ling (2008), all these studies focus on the
behavior of individuals in projects (unlike the stu-
dies on sharing behaviors above). The vast majority
of these studies are quantitative, survey-based stu-
dies (Aibinu et al., 2008; Braun et al., 2013; Ekrot,
Rank, & Gemünden, 2016; Ferreira, Braun, &
Sydow, 2013; Kissi, Dainty, & Tuuli, 2013),
which is typical for studies on extra-productive
behavior in line organizations (Organ et al., 2006).
An exception is the study by Braun et al. (2012),
who apply the OCB concept based on a qualitative
empirical study on the context of projects as well as
on project networks, and thereby identify four
dimensions for project citizenship behavior (help-
ing, loyalty, compliance, proactiveness), and three
dimensions for network citizenship behavior (net-
work loyalty, relationship maintenance and self-
development). Theoretical lenses that were applied
by these studies were citizenship behavior (Braun
et al., 2013; Braun et al., 2012; Ferreira et al., 2013),
social exchange theory and reciprocity (Aibinu
et al., 2008), self-consistency theory in combination
with voice behavior (Ekrot et al., 2016), and trans-
formational leadership in combination with an inno-
vation climate (Kissi et al., 2013). Quite similar to
the studies on sharing behavior, there are some
publications which focus on the behavior of the
individual in projects as a unit in and by itself
(Ekrot et al., 2016; Kissi et al., 2013), while the
majority of studies points to the project-
overarching influence of extra-productive behavior.
Aibinu et al. (2008) emphasize the role of perceived
fairness as an antecedent for cooperative behavior
in the relationship between general contractors and
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The Behavioral “Glue” in OPM 259
their subs in the construction and engineering sec-
tor. The studies by Braun et al. (2012), Braun et al.
(2013) and Ferreira et al. (2013) explore how citi-
zenship behavior not only improves the functioning
and performance of single projects but also how it
shapes relationships beyond projects and maintains
project networks.
Antecedents
There has been a considerable amount of research
on the preconditions for or antecedences of produc-
tive behavior. These findings are not only relevant
to project management scholars, but also offer
direct implications for project management
practice. In particular, conditions that prove to
have an effect on performance measures may be
considered as “best practices” or even success
factors. However, and not surprisingly, these con-
ditions often appear to be rather complex, organiza-
tionally embedded, or historically grown, and thus
difficult to replicate. In the following section, the
major antecedents which have been investigated by
project management scholars are reviewed (see also
Table 17.4).
Trust
Research shows that trust or trustworthiness is an
important precondition for the exchange of knowl-
edge with other team members, who may even be
employees from other companies. Park and Lee
(2014) found in an empirical study that trust is
often closely related to dependence on other team
members, and that both trust and dependence influ-
ence sharing behavior if there is a high frequency of
communication, if the projects are of similar value
and if a corresponding level of expertise is involved.
Wiewiora et al. (2014) show that elements of cul-
ture, trustworthiness, and knowledge sharing beha-
vior are interrelated. They provide empirical
evidence that culture affects the perception of the
value of trust during cross-project sharing.
Moreover, this study provides evidence on how
a friendly and noncompetitive atmosphere at work
is likely to promote mutual trust between project
managers. In contrast, competitiveness and
 260 Timo Braun

Table 17.4 Antecedences of Productive Behavior

Antecedent Publications Dependent Variable

Trust Park, Lee (2014) Sharing behavior

Wiewiora et al. (2014) Sharing behavior
Culture Adenfelt, Lagerström (2006) Sharing behavior
Müller (2015) Sharing behavior
Ferreira et al. (2013) Extra-productive behavior
Personal and team characteristics Aibinu et al. (2008) Extra-productive behavior
Bosch-Sijtsema, Hendriksson (2014) Sharing behavior
Ding et al. (2014) Sharing behavior
Ekrot et al. (2016) Extra-productive behavior
Kissi et al. (2013) Extra-productive behavior
Leybourne, Sadler-Smith (2006) Sharing behavior
Magni et al. (2013) Improvising behavior
Nesheim, Hunskaar (2015) Sharing behavior
Ruuska, Variainen (2005) Sharing behavior
Zhang et al. (2013) Sharing behavior
Environmental conditions Gallo, Gardiner (2007) Improvising behavior
Gross (2014) Improvising behavior
Hartmann, Doree (2015) Sharing behavior
Koskinen et al. (2003) Sharing behavior
Leybourne (2006) Sharing behavior
Wang, Ko (2012) Sharing behavior

achievement (“market type culture”) are less likely
to encourage trustfulness. In contrast to improvising
and extra-productive behavior, trust has not yet
been the subject of investigation as an antecedent
in the domain of project management.
Culture
The notion of organizational and project culture
is closely connected to trust. While trust is often
a matter of (dyadic) interpersonal relationships,
culture can be found at the level of organizational
units. Adenfelt and Lagerström (2006) found that
organizational culture is the most important enabler
for knowledge sharing. Other enablers are the
structural design of the organization, individual char-
acteristics, and communication technology. These
other enablers are interdependent and their impor-
tance varies during the course of a project. Müller
(2015) shows in a case study that the formal and
informal enactment of knowledge sharing practices
are shaped by cultural characteristics. In particular,
she finds a positive influence of trust in colleagues and
employees, collegiality, and solidarity on cross-
boundary knowledge sharing actions. Analogously
to trust, there is very little research that assesses the
influence of culture as an antecedent for improvising
and for extra-productive behavior in the project man-
agement domain. One exception is a study by Ferreira
et al. (2013) which shows that citizenship behavior is
determined by the culture of the individual’s nation of
origin (e.g., Latin countries cluster versus Germanic
cluster).
Personal and Team Characteristics
Individual traits and skills as well as team configura-
tions turn out to have a very strong influence on all
three types of behavior, whether with reference to
sharing, extra-productive or improvising behavior.
This contains structural properties, e.g., the in-group
versus the out-group perception of team membership
(Nesheim & Hunskaar, 2015), formal organizational
structure versus semiformal structures such as
communities (Ruuska & Vartiainen, 2005), project
delivery modes (Zhang et al., 2013), or the structural

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dispersion of project teams (Magni et al., 2013; see
also Chapter 15 in this book). Moreover, certain traits
of the individual or the team also influence productive
behavior. In particular, intuition and experience
(Leybourne & Sadler-Smith, 2006), team-based self-
esteem (Ding et al., 2014), organization-based self-
esteem in combination with affective commitment
(Ekrot et al., 2016) and team cohesion (Magni et al.,
2009) have proven to be significant antecedents.
Finally, the interaction of the team members has also
proved to be an antecedent. The quantity and quality
of interactions (Bosch-Sijtsema & Hendriksson,
2014), the perceived fairness of interaction (Aibinu
et al., 2008), and a transformative team leadership
(Kissi et al., 2013) were identified as drivers of pro-
ductive behavior.
Environmental Conditions
Behavioral patterns in projects are also influenced by
the broader project or organizational environment.
This includes, of course, contingencies which arise
from the unique historical, organizational, and cul-
tural context in which project work is embedded
(Hartmann & Dorée, 2015). Wang and Ko (2012)
identify knowledge categorization and indexing, the
overall management style and the level of task com-
plexity as the main contingencies for knowledge
sharing practices. In a similar vein, the study by
Koskinen et al. (2003) suggests that the specific
situations in which project work takes place needs
to be considered. They identify the opportunity for
face-to-face interaction, a common language, and
mutual trust and proximity as being important situa-
tional factors. Similar findings were made relating to
improvising behaviors. Gallo and Gardiner (2007)
investigated the sectoral influence of the highly struc-
tured and legally regulated UK financial industry in
terms of its constraining and facilitating effects on
improvising behaviors (for the influence of industry
clusters on OPM, please see Chapter 19).
Accordingly, Leybourne (2006) finds that in spite of
the rigid “plan, then implement” of project manage-
ment, this structure allows extensive improvising
efforts by project members. Gross (2014) argues
that improvising works best in complex or familiar
projects, or in the case of unplanned changes in the
course of a project.
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The Behavioral “Glue” in OPM 261
Consequences
Although the majority of studies on productive beha-
vior in a project setting focus on the antecedents,
recent research has also devoted an increasing
amount of attention to the consequences of produc-
tive behavior. In this regard, foremost research inter-
est tackles the question as to whether productive
behavior in fact really has a positive outcome at the
team level, and if it enhances project performance.
However, the performance link is not self-evident
and is at least somewhat controversial (Podsakoff
et al., 2000). For example, knowledge sharing beha-
vior may also lead to bad consequences if knowledge
floats away to competitors who can then use it in
order to be first on the market. Although extra-
productive behavior may well be “nice to have,”
and create a good, friendly work atmosphere,
whether or not it is likely to increase productivity is
questionable. Finally, improvising behavior might
stimulate ideas and fresh thinking, even though it is
not in line with the corporate strategy of a project’s
parent organization. Nevertheless, some studies offer
empirical evidence proving the positive outcome of
productive behavior in projects – this applies to all
three types of productive behavior that have been
investigated (see Table 17.5).
Team Flexibility
There is evidence that productive behavior can
make organizing smoother, i.e. it enhances pro-
blem-solving and helps to increase flexibility
within project teams when having to maneuver
through difficult situations or cope with changing
Table 17.5 Consequences of Productive Behavior
Independent
Consequence Publications Variable
Team flexibility Adenfelt (2010) Sharing behavior
Zhang et al. (2013) Sharing behavior
Within project and Braun et al. (2013) Extra-productive
beyond project Ferreira et al. behavior
performance (2013) Extra-productive
Magni et al. (2013) behavior
Improvising
behavior
 262 Timo Braun
environmental conditions. Zhang et al. (2013),
for example, show that tacit knowledge sharing
increases the flexibility of the project team.
Thereby, the team’s dynamic capabilities are
improved which improves the chance of succeeding
in dynamic environments. Adenfelt (2010) argues
that knowledge sharing is also a precondition in
itself. Only if the relevant knowledge is shared
among the team members will future knowledge
sharing work effectively.
Within-Project and Beyond-Project
Performance
A few studies have tested the effect of improvising
and extra-productive behavior on performance
measures. These measures can be differentiated
into the project level; e.g., whether the project was
completed on time, on budget and with the given
qualitative specifications (“iron triangle”) and the
beyond-project level; i.e., whether productive beha-
vior has an impact that goes beyond the impact on
a single project. For example, it may perhaps influ-
ence the functioning of future projects or permanent
relationships (e.g., subcontractor relations). In fact,
Braun et al. (2013) and Ferreira et al. (2013) present
evidence that extra-productive behavior has an
effect on the within-project measures of the iron
triangle, but also helps to improve and stabilize
relationships that reach beyond single projects.
The effect on the iron triangle was also confirmed
by Magni et al. (2013), who analyzed the effect
of improvisation on the success of new product
development projects. Thus, it should be considered
that the effect of productive behavior is in some
cases not observable initially, but it may still have
an important long-term effect on interpersonal and
interorganizational relationships.
Where To Go from Here? Future
Research Directions
This review offers a structured picture of the state-
of-the-art (“Where are we now?”) in this field of
research. Based on these insights, the next step
should be to develop a future research agenda
(“Where do we go from here?”). During the
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bibliographic analysis, two distinctive research pat-
terns became increasingly evident. Both lines of
reasoning use established ideas or concepts from
one field of application (within/between projects)
or from one discipline (project management
research/work and organizational psychology) in
order to fertilize the other respective field or
discipline.
Within- and Between-Project
Cross-Fertilization
Classic project management research and practice
very much focused on analyzing and improving struc-
tures and practices within the project as a distinctive
unit of analysis. In this tradition, a couple of the
reviewed studies analyze antecedents at the project
team level or investigate the effect of productive
behavior on project-related outcomes, particularly
on the measures of the iron triangle. Nonetheless,
and following Engwall’s (2003) call to look at pro-
jects in their organizational, relational and historical
context, an increasing number of studies look beyond
the boundaries of a distinctive project. For example,
the flow of knowledge across organizational bound-
aries has become a widespread topic of analysis
(Braun et al., 2013; Braun et al., 2012; Hartmann &
Dorée, 2015; Müller, 2015; Nesheim & Hunskaar,
2015; Ruuska & Vartiainen, 2005). But many studies,
particularly large-scale cross-sectional survey studies,
do not systematically reflect this important differen-
tiation between a within-project versus a beyond-
project perspective (see Figure 17.1). However,
t=2
ps
ns g
tio in
hi
la go
t = 1 t=1
re On
t = 0 t=0
Project
Project
A Project C
e
m
B
Ti
Parallel stream of events
Figure 17.1. Within- and between-project
cross-fertilization.
 The Behavioral “Glue” in OPM 263

contingencies like the shade of the future in the form
of a follow-up project or contract, or in the form of
constraints due to parallel projects which consume
resources, of course have an impact on current pro-
jects. Against this background, various research ques-
tions can be raised which account for the premise of
embeddedness and contingency. Some of these ques-
tions are: What are the differences in productive
behavior in the case of internal versus interorganiza-
tional projects? How does the shade of future events
influence current organizing in projects? How do
temporal organizing and permanent structure relate
to behavioral patterns?
Interdisciplinary Cross-fertilization
Another option for cross-fertilization arises from
the multidisciplinary nature of research on project
organizing. This is partly due to the manifold char-
acter of this organizational form (see Lundin, 2011;
Söderlund, 2011), which starts already with the
diversity of productive behavior. This review
shows that the research streams on sharing beha-
vior, extra-productive behavior, and improvising
behavior are growing very fast, but to a degree
these remain isolated. For example, the scholars
who work on extra-productive behavior hardly
acknowledge the findings on improvising and shar-
ing behavior. This applies to the other types of
productive behavior as well. Against this back-
ground, it might prove fruitful to learn from related
research streams. For example, there is an abun-
dance of results on culture as an antecedent for
sharing behavior, while little research has been
done on the role of culture for improvising in pro-
jects, which is quite surprising. It seems plausible
that an organizational culture that offers a high
degree of freedom or, on the other hand,
a structure that enforces creative actions, may also
stimulate improvising behavior. Another example is
extra-productive behavior which turns out to have
consequences beyond the termination of the project
in terms of relationship building (Braun et al.,
2013). In a similar way, the impact of sharing
behavior on long-term business and/or personal
relationships could be subject to future studies (see
Figure 17.2). Thus, some future research questions
are: How does project or organizational culture
affect improvising behavior? What is the effect
of sharing behavior on project-overarching
relationships?
Another, more authentic view on interdisciplin-
ary cross-fertilization may ask for a further integra-
tion of original project management research on the
one hand and organizational behavior research, par-
ticularly through work and organizational psychol-
ogy, on the other. As shown in Table 17.1, studies
on behavioral issues in projects are increasingly
published in general management or industry-
related journals (e.g., information systems,
construction). Moreover, concepts that were devel-
oped in organizational psychology; for example,
citizenship behavior or voice behavior, are increas-
ingly applied in the domain of project management
research. Nevertheless, there is still plenty of room
to investigate how the two disciplines may benefit

Sharing behavior

Project Work and

Extra-productive
management organizational
behavior
research psychology

Improvising behavior

Figure 17.2. Interdisciplinary cross-fertilization.

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 264 Timo Braun
from one another. In fact, behavioral issues that are
prevalent in project management research are
hardly published in journals of organizational psy-
chologists, even though they also look at (project)
teams, but without accounting for the particular
implications of this organizational form. Why not
consider publishing behavioral project manage-
ment topics in renowned organizational behavior
journals such as the Journal of Applied
Psychology, Personnel Psychology, Journal of
Organizational Behavior, or Leadership
Quarterly? Possible research questions that could
be addressed in this regard would be: How does
temporality in general and the termination of
certain project types in particular affect produc-
tive behavior? How do contingencies of project-
organizing affect productive behavior? How does
productive behavior contribute to performance
beyond single projects? In recent years, we can
see promising attempts to bring these disciplines
closer together. One notable example is the
book edited by Chiocchio et al. (2015), to which
organizational behavior and project management
scholars have jointly contributed.
Summary
The objective of this study was to provide a detailed
review of studies from 2006 to 2016 on the nature
of productive behavior in a project setting, and
its antecedents and consequences. The review
shows that there is scholarly interest in this
behavioral “glue” that makes projects work or not.
The reviewed studies turned out to be diverse, using
different methods and theoretical lenses, and the
analytic levels and foci also varied extensively.
Three distinctive behavioral patterns emerged
from the analysis; namely: (1) sharing behavior,
(2) improvising behavior, and (3) extra-productive
behavior. Most of the research focuses on antece-
dents of these behaviors and shows positive influ-
ences derived from relationships based on trust, and
the organizational and project culture, and on team
characteristics as well as environmental conditions.
It is evident that OPM research and research in
organizational behavior run parallel to one another
to a certain extent, but do not sufficiently
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acknowledge each other. Against this background,
a future research agenda is developed based on the
principles of a “within” versus “between” project
cross-fertilization as well as an interdisciplinary
cross-fertilization of research on productive
behavior in OPM.
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 CHAPTER
18
Developing Organizational Project
Management Competencies through
Industry Clusters
CHIVONNE ALGEO and JULIA CONNELL
Introduction
This chapter investigates people-related issues that
span across organizations and projects by exploring
relevant literature on the reported roles, skills, and
competencies of project managers (PMs) and pro-
ject portfolio managers (PPMs). The application of
specific principles that are considered to support
PMs and PPMs toward effective organizational pro-
ject management (OPM) will be outlined, before
describing how industry clusters may provide
a further mechanism for knowledge sharing and
project management competency development.
Young and Conboy (2013) suggest that there has
been increasing interest in project management
competencies in recent times, with PMs seeking
guidance on desired project management competen-
cies, in addition to credentials that will enhance
their careers. They also point out that, although
competency standards have been developed by the
relevant industry bodies for PMs (Association for
Project Management, 2006; Australian Institute of
Project Management, 2010) as a way of identifying
basic performance requirements, there has not, as of
2017, been any attempt to develop a set of project
portfolio management competencies. Given that
PMs are likely to be responsible for more than one
project concurrently, a move away from project
management toward project portfolio management
is suggested as relevant for contemporary organiza-
tions. Jonas (2010) states that a project portfolio
constitutes a group of projects that compete for
scarce resources and are conducted under the
sponsorship or management of a particular organi-
zation. Whereas Jonas (2010) focuses on the roles
and responsibilities of PPMs, particularly senior
268
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management involvement, Young and Conboy
(2013) focus on the development of competency
standards for PPMs.
This chapter aims to propose a set of principles
for OPM based on a review of accepted project
management competencies. These principles are
intended to form the basis for PMs and PPMs to
improve their knowledge and competencies in
OPM.
One of the key problems with project manage-
ment is the transitory nature of project teams. Team
members join together to work on a project; the
team is then disbanded when the project is
completed, and members move on to join a new
team and begin a new project. Thus, collective
knowledge is unlikely to be perpetuated in this
context. Grabher (2004) points out that projects
are predicated on a dense fabric of lasting ties and
networks that provide key resources of expertise,
reputation, and legitimization relying on an intricate
project ecology. Further, Grabher (2004) suggests
practices of knowledge creation and distribution
in project ecologies span organizational (or indeed
departmental) boundaries in different ways.
Knowledge sharing can improve access to knowl-
edge within one’s own organization as well as
knowledge residing in other organizations
(Cummings, 2003, p. 1). The benefits of organiza-
tions moving away from closed to more open inno-
vative behaviors is increasingly being understood,
with clusters complementing and facilitating
more cooperative exchanges between member orga-
nizations (Chesbrough, 2006). Consequently, while
traditional project management accreditation in
project management and project portfolio manage-
ment can be achieved through study and tasks

undertaken with industry bodies such as the Project
Management Institute, we propose that knowledge
sharing through industry clusters can help to
develop project ecologies, support the development
of PMs and PPMs, as well as provide insights into
innovative OPM practices.
Thus, we set out to answer the following
questions:
1 What are the skills and competencies considered
essential for PMs and PPMs to effectively deli-
ver OPM outcomes?
2 What are the key challenges that are likely to
prevent the achievement of the above, and what
strategies can be applied to counter these
challenges?
3 What role can industry clusters play in support-
ing the development of project management and
project portfolio management competencies?
Answering these questions will assist in eliciting
support mechanisms for PMs and PPMs.
Ultimately, through a cycle of continuous develop-
ment, it is intended that knowledge capital will be
generated so that OPM can flourish within complex
environments.
OPM Roles, Skills, and Competencies
for PMs and PPMs
OPM has a functional role to deliver strategy, and
relies on PMs and PPMs to possess the competen-
cies “. . . needed to fulfil these activities . . .
[within] . . . the internal cultural context” (Drouin
et al., 2012, p. 190). The link between business
performance and competently managed projects
was identified by Morris (2000, p. 22). After ana-
lyzing 763 papers and book reviews, he suggests
there is:
. . . a need, fundamentally, to refocus the discipline
and its research paradigm. We need to understand
better, in particular, the linkages between project
management and business performance, and pro-
ject management’s generic responsibilities and
actions in the area(s) of technology and design,
IT, supply chain management . . . and the way we
deal with and build knowledge, learning and com-
petency is key.
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Developing OPM Competencies 269
Competencies are “. . . individual and measurable
skills demonstrated and assessed against agreed
standards of competence” (Cairns, 2000, p. 2) that
describe “. . . performance criteria for workplace
performance” (Crawford, Morris, Thomas, &
Winter, 2006, p. 723). Similarly, Parry (1996,
p. 52) describes competencies as the knowledge,
skills and abilities that are driven by behavior to
produce outputs that yield results.
The various levels of competency required to
fulfill the project or portfolio outcomes reflect the
“. . . complexities of project arrangements” (Cicmil,
Williams, Thomas, & Hodgson, 2006, p. 678).
The link between skill (an ability) and competency
(a standard to measure skill against) is represented
by the four phases of competency described by
Flower (1999, p. 64):
1. Unconscious incompetence: you do not know
how little you know, and express this as ‘This is
no big deal, it’s just like . . .’
2. Conscious incompetence: you realize how little
you know, and express this as ‘This is impos-
sible. I will never learn this . . .’
3. Conscious competence: you know what you
need to know, and express this as “Step 1,
Step 2” or equivalent phrases verbally or
cognitively.
4. Unconscious competence: you “just do it”
without thinking or verbalizing an action.
Although not stated by Flower (1999), poten-
tially an “ideal state” would be for PMs and
PPMs to become unconsciously competent while
continuously learning new skills and competen-
cies, or even just remaining open to new ideas
(i.e., Step 3).
The skills required of PMs and PPMs to
competently perform certain tasks is defined by
competency standards and bodies of knowledge
(BOK). If PMs and PPMs are competent they are
described as being “. . . properly qualified; capable”
(The Macquarie Dictionary, 2009, p. 352), and
these capabilities can be assessed against a set of
standards and established BOKs. These BOKs are
often developed by industry associations and are
generally accepted standards of knowledge.
However, the BOKs are also transient, as new
knowledge is developed and accepted, and there
 270 Chivonne Algeo and Julia Connell

are known and unknown gaps in this knowledge.
The dominant global BOK for PMs and PPMs
is A Guide to the Project Management Body
of Knowledge (PMBOK® Guide) (Project
Management Institute, 2013b). In addition, an inter-
national standard for project management was
released in 2012 by the International Organization
for Standardization (ISO) group (ISO, 2011).
The Draft International Standard ISO/DIS 21500
Guidance on Project Management “. . . provides
generic guidance on the concepts and processes
of project management that are important for
and have impact on the achievement of projects”
(ISO, 2011, p. 5).
Educational qualifications are a separate form
of standard that provides recognition of capability
and varies between countries. An industry-based
certification is time limited and assesses compe-
tency, whereas an educational qualification issued
by a government-registered provider, such as
a university or private institution, exists for the life
of the recipient. To develop appropriate levels of
project management competency the “. . . necessary
mixture of skills should be supported by project
management education . . . beyond merely provid-
ing technical skills for project managers”
(Ramazani & Jergeas, 2015, p. 44).
Takey and de Carvalho (2015, p. 784) point out
that these competency frameworks recommend
mapping both hard (technical), and soft (social)
skills, noting the number of studies focused on the
social competency domains is increasing. Project
management competencies have been grouped by
Brière, Proulx, Flores, and Laporte (2015) into three
categories: (1) organizational and management
competencies, (2) project management or technical
competencies, and (3) human skills, soft skills, or
behavioral competencies. These competency cate-
gories were tested empirically when interviewing
twenty-eight PMs who were working in eighteen
Canadian NGOs in Quebec and Montreal.
The results indicate eleven competencies, with
adaptability ranked as the most important among
the PMs, see Table 18.1 (Brière et al., 2015,
p. 124) below with the highest ranked competencies
starting from 1.
In a study of ninety-seven PMs using a competing
values model (CVM), Trivellas and Drimoussis
(2013) identified three competency categories that
led to an increase in the delivery of successful
project outcomes. These categories included: beha-
vioral competencies (efficiency, values apprecia-
tion, and openness); managerial competencies
(teamwork, customer service, and system control);

Table 18.1 Details of PM Competencies

PM Competencies Details

1. Adaptability Logistic aspects; cultural differences; tools used

2. Span of abilities General; areas of expertise; project management; international development;
intercultural
3. Management skills Project; financial; work organization; information; people
4. Communication Writing; listening; oral expression; dispute resolution
5. Personal qualities Working capacity; coping with stress; humility; patience; thoroughness; intuition;
engagement
6. Interpersonal skills Team work; negotiate; establishing a sense of trust
7. Leadership Engage; strategic vision; understanding
one’s environment
8. Ethics Management practices; individual requests; personal behaviors
9. Networking and local knowledge Local experts; stakeholders; networks
10. Capacity building Local organizations; staff training
11. Change management Strategies
Source: Brière et al., 2015, p. 124. Copyright Brière et al. used with permission.

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at https://www.cambridge.org/core/terms. https://doi.org/10.1017/9781316662243.023

and emotional competencies (social awareness).
Correlating project success with the potential for
career advancement was directly impacted by
national culture, ethnicity, and managerial compe-
tencies in a study of one hundred British private
sector managers and 120 Singaporean public sector
managers (Chong, 2013). The differences between
what competencies were considered important in
the public and private sector were of particular
interest. Integrity and reading and written commu-
nication skills were highly valued in the public
sector, while business sense, achievement orienta-
tion, and tenacity were considered important in the
private sector.
Further, Takey and de Carvalho (2015) state
that the Australian Institute of Project
Management is the only accreditation body to
differentiate project management competencies
at three professional levels: project practitioner
(PP); project manager (PM); and project director
(PD). Recently, other bodies have expanded
their competency assessments beyond arbitrary
knowledge tests. Clearly, competencies per-
formed by junior professionals in less complex
contexts (e.g., straightforward, routine projects)
require different levels of proficiency than
more complex scenarios. These levels of profi-
ciency have been categorized by Cicmil et al
(2006, p. 680) into the following five levels,
from least to most competent. See Appendix 1
for details:
1. Novice: The rules are necessary for gaining
initial experiences, but they can quickly
become a barrier to acquiring skills at higher
levels.
2. Advanced Beginner: Personal experience via
trial and error becomes more important than
context-independent, verbally formulated facts
and rules.
3. Competent Performer: The individual learns to
apply hierarchical, prioritizing procedures for
decision-making on the basis of set priorities
rather than on the total knowledge of the given
situation. Choosing the goal and plan is not
unproblematic – it implies personal involve-
ment in actions, hence the need for responsi-
bility/ethics.
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Developing OPM Competencies 271
4. Proficient Performer: Intuitively understands
and organizes the tasks in the local situation in
the living present, but continues to reflect ana-
lytically on what will happen as the emergent
situation unfolds.
5. Expert or Virtuoso: Characterized by effortless
performance at the level of virtuosity; no think-
ing/doing, decision/action, or plan/implement
divide; action based on logic replaced by
experientially based action; intuitive and
rational at the same time.
Organizational and Management
Competencies
To identify competencies appropriate for PMs and
PPMs in the context of OPM, the actual operating
structures of the organization need to be considered.
Kersiene and Savaneviciene (2015, p. 58) suggest
the following operating structures impact compe-
tency in an organization:
• the main function of subsidiaries is to deliver
organization products and to carry out headquar-
ters strategies;
• subsidiaries perform according to the headquar-
ters’ instructions, though flexible to the local
environment;
• decentralized structure with independently acting
subsidiaries; and
• integrated network of different but equivalent
subsidiaries, where there are large flows of
resources, people and information among them.
To develop competency across these multiple
structures, Kersiene and Savaneviciene (2015, p. 60)
suggest the following competencies are critical:
1. the ability to adapt in different cultural
environments;
2. the ability to absorb, spread and create knowl-
edge; and
3. the ability to execute successful international
assignments.
To be internationally competitive and respond
appropriately to a demanding global economy,
organizations require PMs and PPMs to possess
these critical organizational competencies across
multiple organizational structures. In addition,
 272 Chivonne Algeo and Julia Connell

PMs and PPMs must possess competency at Technical Competencies

the individual and organizational level to gener-
Formal educational courses offer learning opportu-
ate collaborative awareness (J. Barnes & Liao,
nities that predominantly include technically
2012).
focused content based on BOKs. Project manage-
When delivering projects, an organization relies
ment BOKs have historically focused on ”hard” or
on “. . . competent and qualified personnel . . .
technical skills when defining project management
to work in the field with different cultures and
competency standards, “. . . stressing the need
sometimes in difficult conditions and complex
for documentation, measurement and control
environments” (Brière et al., 2015, p. 116). Within
of a project during its life cycle” (Carvalho, Patah,
these organizations, project leaders, which includes
& de Souza Bido, 2015, p. 1511). The PMBOK®
PMs and PPMs, must be skilled in the project man-
Guide (Project Management Institute, 2013a) docu-
agement processes and techniques. Brown (2008)
ments the “Technical know-how [which] includes
identifies this requirement as one of seven organiza-
the importance of applying project management PM
tional dimensions. Collectively these dimensions
skills” (Carvalho et al., 2015, p. 1511). These skills
“. . . significantly influence the practice and
are often based on knowledge areas that are
ultimately the success of the management of
described in BOKs and can be grouped according
projects” (Brown, 2008, p. 1). To aid the project
to transferable functions. The 10 knowledge areas
leader in delivering successful projects “The role of
defined by the PMBOK® Guide (Project
the mentor is deemed extremely important to assure
Management Institute, 2013a) include: scope;
conformance to accepted generic protocols and best
time; cost; quality; HR; risk; communications;
practices and procedures” (Brown, 2008, p. 3).
procurement; stakeholders; and integration.
At this organizational level, successful cross-
Transferable functions, as defined by Edum-Fotwe
functional teams “. . . employ multiskilled, flexible,
and McCaffer (2000), include: leading; communi-
versatile, and mature project team members”
cating; negotiating; and problem-solving (2000,
(Brown, 2008, p. 8).
p. 114). Moreover, de Carvalho (2013) highlights
However, a number of researchers have pointed
the importance of soft skills when managing pro-
out the temporary nature of projects and project
jects, especially in relation to communication and
teams. For example, Silvius and Schipper (2014)
stakeholder management.
maintain that “. . . projects are, as temporary orga-
nizations, related to a nontemporary “permanent”
organization, and are generally created to bring Behavioral Competencies
about changes that benefit the strategy or goals of
The relationships required to communicate and
the organization” (2014, p. 42). In a permanent
effectively manage stakeholders requires “. . . non-
organization, strategic management includes not
technical and often social-oriented skills” (Edum-
just goal setting, but also evaluating the business
Fotwe & McCaffer, 2000, p. 112). These can be
performance of the organization against these
seen, for example, in the “. . . societal expectations
goals. Hence, if performance is not satisfactory
for environmentally responsible behavior, and
then projects and project teams are likely to be
maintaining the right relationships that will have
created to address performance deficits and PMs
a positive impact on the project outcome” (Edum-
can take on the important role of change agents
Fotwe & McCaffer, 2000, p. 112). The behavioral
in organizations (Silvius & Schipper, 2014).
competencies of PMs and PPMs are developed
However, as pointed out previously, collective
through the “. . . competency practitioners display
knowledge may not be shared beyond the project
in unique, uncertain, and conflicted situations in
team members, or may not be perpetuated once
practice” (Schön, 1987, p. 13). These competencies
a project has been completed, underscoring the
include: “. . . human skills, mainly communication,
need for project networks and clusters to fulfill
influence, leadership, motivation, negotiation,
this role.

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creativity, ethics, and managing group processes or
team building” (Brière et al., 2015, p. 118). Yet these
factors rely on the ability of a PM to recognize, judge,
and then deliver while project managing, which is
also referred to as “reflection-in-action.” At a team
level, individuals are “. . . mutually accountable for
their results [and] generally have complementary
skills or knowledge and an interdependence that
requires that they work together to accomplish
a common team goal (Parker, Zielinski, &
McAdams, 2000, p. 17). The dynamic and complex
nature of OPM requires not only “. . . the selection of
team members based on individual skills and perfor-
mance in alignment with task characteristics” (Hsu,
Weng, Cui, & Rand, 2016, p. 82), but also an under-
standing of the non-linear social behavior between
project team members and their environment.
Challenges and Principles in Achieving
Effective Levels of Skill and Competency
for PMs and PPMs
In order to manage projects simultaneously, in par-
ticular to manage the implications stemming from
each project’s wider organizational context, PMs
and PPMs require current and appropriate levels of
skill and competency. Appropriate skills, as out-
lined previously, will assist PMs and PPMs when:
competing for resources; obtaining and maintaining
management attention; mastering power struggles
with other PMs and PPMs or line managers; coping
with politics; and so on.
Attempting to improve project outcomes in
alignment with an organization’s strategy can be
challenging for PMs and PPMs. Through balan-
cing project and business management practices,
and potential overlaps with OPM, PMs and
PPMs can aim to achieve this outcome.
The relationships between disparate yet aligned
foci can bring “. . . balance and coordination . . .
leading to better performance, better results, and
a sustained competitive advantage”(Project
Management Institute, 2014, p. 3).
Organizational structures can present a challenge
to OPM where “. . . functionally structured organi-
sations do not have staff sufficiently skilled to
confidently act as project leaders for the
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Developing OPM Competencies 273
implementation project” (Brown, 2008, p. 3).
In addition, the skills required for project leaders,
who are often taken from a functional role to man-
age a project, “. . . are completely different from that
of their occupation” (Brown, 2008, p. 3). To address
this issue, PMs and PPMs can develop relationships
within most organizational structures for the
specific projects being managed; ensure appropriate
project staff are engaged and trained in both the
technical “hard” skills and social “soft” skills;
and for the duration of the project aim to ensure
that there are experienced mentors available to
guide less experienced project team members.
In addition, prior to any project organization “. . .
managers should be as aware as possible of how
interdependent relationships are distributed across
a cohort [as] these interdependencies may have
as much or more effect on team performance than
individual knowledge, skills, and abilities, and yet
are often overlooked” (Hsu et al., 2016, p. 92).
To develop the social competencies of PMs and
PPMs toward the implementation of successful
projects, “. . . it is necessary to combine both
hard and soft skills” (Monteiro de Carvalho,
Patah, & de Souza Bido, 2015, p. 1511 as cited
in Söderlund & Maylor, 2012). This requires
senior management to commit to development
programs that are aligned with the culture of the
organization. To assist senior management in
establishing such programs, “. . . potential lessons
for management development policy” (Edum-
Fotwe & McCaffer, 2000, p. 112) need to be
embedded in their development planning.
Prior to and during the life of a project, it is
recommended that a mentor be engaged to act “. . .
as an expert advisor on best practises” (Brown,
2008, p. 3), to develop both technical and social
competencies. The relationship between a “master
and an apprentice” is dynamic and often evolves as
competency is attained, with the ability to think and
reflect incorporated into work practices. This pro-
cess of reflection-in-action can become elliptical,
“. . . using shorthand in word and gestures to convey
ideas that to an outsider may seem complex or
obscure” (Schön, 1987). In a project management
context, the “. . . transfer of wisdom and PM knowl-
edge is assisted by . . . creating balance between
existing expertise and creativity through
 274 Chivonne Algeo and Julia Connell
apprenticeships, stretch assignments, coaching and
mentoring” (Bourne & Walker, 2004, p. 238). It is
also suggested that the needs of the individual can
be balanced with the needs of the organization
through dynamically “. . . matching project manage-
ment skills to appropriate projects; and apprentice-
ships, coaching and mentoring” (Bourne & Walker,
2004, p. 239).
When considering how to enhance the skills
and competencies of PMs and PPMs, assumptions
have often been based on the expectation that
there is a limited knowledge base which must be
further developed. A significant challenge is to
identify what the required competency levels are
for changing project tasks, and how to align these
to the skills of project team members. To manage
this potential disconnect in the varying levels of
competency, Edum-Fotwe & McCaffer (2000)
suggest experience is required “. . . for achieving,
maintaining and renewing skills and
competency . . . to address the changing condi-
tions and requirements” (2000, p. 123), and that
the ongoing attainment of these appropriate levels
of competency requires “. . . the combination of
knowledge acquired during training, and skills
developed through experience and the application
of the acquired knowledge” (Edum-Fotwe &
McCaffer, 2000, p. 112).
What Role Can Industry Clusters Play
in Supporting the Development of PMs
and PPMs Competencies?
Contemporary business projects generally rely on
interactions between various networks of actors both
within and between organizations. To help make
these interactions more effective, knowledge sharing
is important. Knowledge needs to flow between indi-
viduals, groups, and organizations in different loca-
tions, as well as within companies, in order to be used
effectively (Connell, Kriz, & Thorpe, 2014).
A particular focus of knowledge sharing in recent
years has been on promoting innovation in collabora-
tive ventures. Whether collaborative ventures refer to
interactions within organizations, networks, strategic
alliances, or industry clusters, they generally require
project management at various levels. Researchers
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have recognized this phenomenon and have been
dedicating increasing efforts toward studying the rela-
tionships between industry cluster knowledge man-
agement and innovation over the past few decades
(Lai, Hsu, Lin, Chen, & Lin, 2014). Porter’s (1998)
cluster definition refers to organizations that are
”interconnected.” These connections refer to the mar-
ket exchange of goods and services, face-to-face
interaction and cooperation, which requires a high
level of mutual trust, proximity, and a meshing of
horizontal and vertical complementarities of
activities.
However, project-based organizations pose
complex problems for information and knowledge
sharing due to the fragmentation and lack of
uniformity of organizational structures, processes,
practices, and technologies (Almeida & Soares,
2014). Notably, Almeida, and Soares (2014) main-
tain that the ineffectiveness of knowledge sharing
between project teams over time is probably the
most important issue project-based organizations
must deal with, as relevant knowledge can be
trapped in an “informational limbo” out of reach
of and unused by the organization. Project-based
organizing involves a multiplicity of organizational
and personal networks (Grabher, 2004), with
networking (the key aspect of clusters) proposed
as the “mantra” of project ecologies.
Cluster strategies have become an integral part of
sustainable regional development, particularly
in Europe, mainly as a means to enable small to
medium enterprises (SMEs) to compete internation-
ally (Montana & Nenide, 2008; Organisation for
Economic Co-operation and Development, 2005;
Yusuf, 2008). Gains can be accrued from knowl-
edge sharing and cooperation, creating greater
synergies between cluster members, among other
things. Knowledge management generally refers to
how organizations create, retain and share knowl-
edge through acquisition, integration, and distribu-
tion, as well as the application of that knowledge in
order to improve the operational effectiveness and
competitive advantage of organizations (Albers &
Brewer, 2003). Knowledge sharing is the means by
which an organization obtains access to its own and
other organization’s knowledge, emerging as a key
research area from a field of study on technology
transfer, innovation, and strategic management

(Cummings, 2003). Effective knowledge sharing is
seen as occurring through a dynamic learning
process where organizational (or in this case clus-
ter) members continually interact with customers
and suppliers to innovate or creatively imitate
(Connell & Thaarup, 2014; Cummings, 2003).
One of the reasons for the proliferation of indus-
try clusters in recent years, particularly in Europe,
has been to support collaborative projects where
workers are brought together from different orga-
nizations. Calamel, Defélix, Picq, and Retour
(2012) maintain that interorganizational colla-
boration has been advocated for various underly-
ing reasons, such as: resource diversification; risk
mitigation; access to complementary competen-
cies; and knowledge transfer. However, to date,
there has been a lack of any discussion concerning
the potential for industry cluster members to be
supported so they can achieve effective project
management outcomes and develop their own
project management capabilities. This is surpris-
ing, given that the reason many members and
member organizations join a cluster is due to the
possibility of interorganizational project colla-
boration. Moreover, given that the nature of
project management frequently requires managers
to move from project to project (even within the
same organization), with different project team
members, an industry cluster can provide a form
of stability and mentoring that may not otherwise
be accessible to PMs and PPMs.
Mentoring was referred to earlier in this chapter
as one way a PM may be able to improve their
effectiveness and levels of skills and competencies.
However, if PMs and PPMs work for SMEs,
they may find it difficult to gain access to a mentor
and mentoring, due to a lack of expertise or time, as
identified by Matlay and Barrett (2006). Mentoring
has been considered as one aspect of support that
may be available for SMEs (Bisk, 2002) and formed
part of an action learning process initiated by one of
the authors with a 200-member industry cluster (see
Connell & Voola, 2013). Although the mentoring
program focused on new cluster members, both the
mentors and mentees reported that they benefited
from the relationships formed. The results showed
that knowledge sharing within the cluster was an
opportunity to build relationships more informally
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Developing OPM Competencies 275
than when undertaking day-to-day business, and it
also helped to enhance member relationships. One
mentor/mentee described how they formed a project
team with other cluster organization members to
write tenders, as some of the members possessed
skill sets that others did not, and vice versa, so
each was able to share their own expertise as an
additional resource (Connell & Voola, 2013).
However, not all cluster relationships prove to be
successful. To enable cooperation and collaboration
between members, trust has been identified as
a fundamental characteristic of networks that can
significantly influence the quality of information
and knowledge flows between members (Connell
& Voola, 2013; Murphy, 2006). Trust has also been
identified as an important prerequisite for develop-
ing interorganizational relationships that can facil-
itate intermember, and thus interorganizational,
knowledge (Fukuyama, 1995). Trust is also an
important component affecting the types of man-
agerial practices and cultures in both project teams
and organizations in relation to the type of commu-
nication and resources shared between parties, and
the specific knowledge-sharing activities through
which the parties seek to facilitate knowledge.
It can of course take considerable time to develop
trust among project partners, and may require
repeated collaborations for it to occur (Barnes,
Pashby, & Gibbons, 2002). Barnes, Pashby, and
Gibbons’ (2002) multicase evaluation of collabora-
tive research and development projects also
indicated that the greatest number of project success
factors focused on clearly defined project objec-
tives, project monitoring, planning, and effective
communication.
Calamel et al. (2012) report on the French inno-
vation clusters (the “pôles de compétitivité”), where
the core activity is collaborative projects in
a particular sector – such as health or aerospace.
They found that over a two-year period, collabora-
tion in the projects was dependent on the PMs’ and
PPMs’ coordination efforts as well as the various
actors’ motivation to cooperate. Connell and Voola
(2010) identify the importance of social interaction
as a means to social capital building in their study of
knowledge sharing within a strategic alliance. They
suggest that “. . . relationships (such as those that
occur within project teams) may be contractual
 276 Chivonne Algeo and Julia Connell
between organizations but it is the interaction of
people that plays out the relationship. Hence, if the
social interaction is positive it will assist in strength-
ening trust” (Connell & Voola, 2010, p. 63). People
in networks, including industry clusters, share
knowledge more effectively with members than
with outsiders, as the networks enhance the dense-
ness of social ties, creating more opportunities to
share knowledge and experience, and develop trust.
However, collaborating and sharing experiences
benefit from structured networks, clusters or orga-
nizational arrangements rather than through ad hoc
processes (Niu, 2010; Tallman, Jenkins, Henry, &
Pinch, 2004). Thus, it is suggested that cluster man-
agers and facilitators actively set up special interest
groups dedicated to the development of skills and
competencies for the effective management of pro-
jects. Projects often focus on the actual tasks (tech-
nical aspects) and the requirements to achieve them
rather than on the dynamics related to managing
projects (interpersonal aspects), PMs and PPMs.
Therefore, strategic reflection processes identified
at various project points may also prove to be an
effective way to provide mentoring and develop-
ment through feedback within clusters that can be
facilitated by mentoring.
Conclusion and Implications
This chapter aimed to answer three questions about:
the skills and competencies that are considered
essential for PMs and PPMs to effectively deliver
OPM outcomes; the challenges that might affect the
acquisition and/or effectiveness of those skills and
competencies, and the strategies to overcome them;
and the role that industry clusters might play in
supporting PMs and PPMs.
What is clear from the key literature reviewed in
this study is that OPM is a complex activity, and
a great deal is expected of PMs and PPMs to deliver
effective outcomes. In relation to the key skills and
competencies required of PMs and PPMs, Brière,
Proulx, Flores, and Laporte (2015) argue that, in
broad terms, they can be classified into three main
areas: (1) organizational and management compe-
tencies; (2) project management or technical com-
petencies; and (3) human skills, soft skills, or
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behavioral competencies. As discussed earlier, dif-
ferent expectations of PMs and PPMs are likely to
be attributed according to their career stage, as
categorized by Cicmil et al. (2006, p. 680); i.e.,
a novice would not be expected to “perform” at
the same level as an expert.
Challenges for PMs and PPMs are more likely
in the area of social competencies; i.e., human,
social, or behavioral competences. It was reported
in a number of studies that the focus of skill devel-
opment has been on technical skills, whereas
employers rate social competencies higher, in
particular, team skills, leadership, and verbal com-
munication (Freudenberg, Brimble, & Cameron,
2011; Jackling & De Lange, 2009). Such generic
social competencies are also important when PMs
and PPMs move on from the ”novice” level to fight
for resources; gain and maintain management
attention; master power struggles with other PMs
and PPMs or line managers; cope with politics;
and so on.
Consequently, it is suggested that PMs and
PPMs, and their respective organizations, would
benefit from joining or forming relevant strategic
alliances or industry clusters, as membership can
support knowledge sharing and mentorship beyond
an individual’s organization. This is especially
important if a PM is situated within an SME or
moves from project to project without organiza-
tional support, as people-related issues span across
organizations and projects.
This chapter has added to current research on
the topic of developing the competencies of PMs
and PPMs by identifying the need for building
social skills to balance the historical reliance on
technical skills. Social skills are also required for
networking in clusters and for the necessary col-
laboration required to provide access to a greater
breadth and depth of knowledge sharing. The role
of informal structures to develop OPM compe-
tency, such as mentors and networks, and more
formal educational models, can support this shift
in focus. As the strategies proposed are based on
relevant literature they represent a limitation
which can be redressed through undertaking
additional research. The authors acknowledge
there are also limitations concerning the range of
literature from different countries, cultures, and
 Developing OPM Competencies 277

disciplines. Therefore, future research will ideally interested in knowledge sharing both within and
build, broaden, and apply flexible frameworks to across organizations.
restore this imbalance. It is suggested that further
research would also benefit researchers and pro-
fessionals on the topic of building and managing Appendix 1 Technical
collaboration for PMs and PPMs, and others Competencies

Level Experience Action based on Comment

Novice Faces a given problem • Instructions (training course, PMBOK) The rules are necessary for gaining
and a given situation in • Learning to recognize objective facts initial experiences but they can quickly
a given task area for the about and characteristics of the situation become a barrier to acquiring skills at
first time (models and definitions of project) higher levels.
• Learning rules of action, as generalized
for all similar situations on the basis of
identified facts, thus context-
independent (project management
methodology, procedures, best practice)
• Evaluating the performance of the skills
on the basis of how well the learned rules
are followed
Advanced Achieves some real-life • Learning to recognize relevant elements Personal experience via trial and error
beginner experience in relevant situations on the basis of their becomes more important than context-
similarities with previous examples independent, verbally formulated facts
(typology of projects) and rules.
• The context of experience becomes
important and decisive in the choice of
relevant elements, in addition to context-
independent rules (learning from
experience, limited reflection) PMBOK
trial and error
Competent With more experience • Learning from own experience and from The individual learns to apply
performer the number of others to prioritize elements of the hierarchical, prioritizing procedure for
recognizable elements situation decision-making on the basis of set
and facts becomes • Organizing information by choosing priorities rather than on total
overwhelming a goal and a plan knowledge of the given situation
• Dealing only with a set of key factors Choosing the goal and plan is not
relevant to the goal and plan, thus unproblematic – it
simplifying the task and obtaining implies personal involvement in
improved results actions, hence responsibility/ ethics.
• The choice of a certain goal and plan and
the need to have a plan is paradoxical
(simultaneous subjectivity and
objectivity) – it is not unproblematic and
requires deliberation, the relationship of
involvement between performer and
environment
• Elements-rules-goals-plans-decision: the
model of analytical, proficient performer
• Ability to think on one’s feet (confidence,
reflection, choice of action and risk
taking)

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 278 Chivonne Algeo and Julia Connell

Level Experience Action based on Comment

Proficient Away from cognitivist, • The awareness of interpretation and Intuitively understands and organizes
performer analytical judgment involved in such decision the tasks in the local situation in the
rationality (rules, making, rather than logical information living present but continues to reflect
principles, and processing and analytical problem analytically on what will happen as the
universal solutions) solving only emergent situation unfolds.
toward • Deeply ”involved-in-the-world”
perceiving situations manager/performer who already knows
rapidly, as he/she has evolved their
intuitively, holistically, understanding of the situation on the
visually, basis of prior actions and experience
bodily, relationally • Reflective understanding and
participation in power relations
Expert or • “Emergent enquiry” – participative Characterized by effortless
virtuoso methodology of knowledge creation in performance at the level of virtuosity;
context No thinking/doing, decision/ action,
• Intuitively, synchronously or plan/implement divide; Action
• Participative critical reflection over the based on logic replaced by
intuition – the self and the group experientially based action; intuitive
• The thought, body, knowledge, and and rational at the same time.
action are inseparable, are
simultaneously forming and are being
form by one another; thinking-doing
• Understanding that power relating is an
intrinsic part of intersubjective relating,
always there
• Considerations for the present and
deliberation about the future
Source: Cicmil et al., 2006, p. 680. Copyright Cicmil et al. used with permission.

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 PART IV

New Directions

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 INTRODUCTION TO PART IV
Shankar Sankaran
Part IV will extend OPM research to new avenues
not often addressed in the field of project manage-
ment, but which are relevant to increase research
quality and elevate the level of OPM research, lead-
ing to novel insights.
The first chapter of Part IV by Øyvind Kvalnes
is “Ethics in Projects” and aims to help managers
to make responsible decisions after weighing the
ethical dimensions of a situation and balancing
them with the economic, reputational, and legal
dimensions. It also helps managers to understand
when moral wrongdoing can occur while making
decisions and how these can be avoided through
honest communication.
Karyne Ang and Christopher Biesenthal take up
the importance of value creation at multiple levels in
organizations to meet stakeholder expectations in
Chapter 20, “Multilevel Value Creation in Projects,
Programs, and Portfolios: Results from Two Case
Studies.” They propose a multilevel, multidimen-
sional perspective of value in organizations. They
conclude that value creation and management within
OPM is an iterative process in which the final values
evolve during the course of managing portfolios,
programs, and projects.
Kaye Remington addresses the question of
how projects, which are discrete units of deliv-
ery with predetermined constraints, can operate
in an organizational world that is dynamic and
emergent in Chapter 21, “An Inherent
Complexity: Projects and Organizations.”
The chapter presents two case studies showing
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how extremely challenging projects can be when
delivered in volatile contexts, demonstrating
how program and project leaders can manage
contradictions and inconsistencies in an OPM
environment.
Lynn Keeys and Martina Huemann address how
OPM can function in the emerging paradigm of
sustainable development, where projects are
expected to be delivered in harmony with the
natural environment, addressing societal concerns
for current and future generations. In Chapter 22,
“Organizational Project Management and
Sustainable Development (SD): Managing the
Interface of Organization and Project SD
Benefits,” they suggest that the goals of OPM and
sustainable development should be aligned and
mutually reinforcing to enhance value creation.
Rodney Turner and Laurene Lecoeuvre, in
Chapter 23 on “The Marketing of Organizational
Project Management,” discuss the roles that the
investor, project organization, and contractor play to
market project-related products and services.
The authors show the importance of stakeholders in
marketing and how marketing not only precedes
a project but is an essential activity to be carried out
throughout the project life cycle.
Kim van Oorschot discusses the notion of
“Shared Space for Organizations: Enablers for
Innovative Projects” in Chapter 24, using dynamic
strategies and project portfolios that can help to
break down traditional learning silos in organiza-
tions. She borrows the notion of “shared space”
283
 284 Shankar Sankaran

from urban design to suggest how enablers for OPM
help to break down silos and increase communica-
tion within and across project teams, fostering the
flow of knowledge and resulting in increased crea-
tivity and innovation.
Helene Delerue and Tom Cronje, in Chapter 25,
titled “Social Media and Project Management:
Symbolism in Action,” argue that while social
media can make a significant contribution to projects,
its power is underutilized. Social media can create a
symbolic universe in which symbolic objectives
could be achieved through symbolic actions. They
illustrate the power of social media in a case study
featuring a large telecommunications firm.
While Part IV does not cover all new directions
that will contribute to OPM, it provides a snapshot
of some aspects of OPM that may become important
in the near future.

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 CHAPTER
19
Ethics in Projects
ØYVIND KVALNES
Introduction
There is a growing awareness that organizations
need to be prepared for ethical challenges in the
management of both single projects and in multi-
project management activities. Interaction with
a variety of stakeholders with competing agendas,
goals, interests, and preferences invariably create
ethical tensions that call for responsible resolutions.
Pressure to deliver products and solutions on time,
and with specific qualities, can generate temptations
to take ethically dubious shortcuts. The emission
cheating scandal in Volkswagen in 2015 is an
example where such pressure led to serious misbe-
havior from engineers, who were told to create
a motor that satisfied strict emission criteria, with
failure to do so not being an option. When it became
apparent that the criteria could not be met within the
scope offered by available technology, it seems that
a destructive creativity set in, leading to grave mis-
conduct. In the aftermath of such dramatic events in
organizational settings, ethical considerations come
to the forefront. Organizations face even stricter
compliance demands from authorities and are
obliged to produce revised and more precise codes
of conduct and ethical guidelines, and to put project
managers and employees through ethical training
sessions. Organizations can also seek to go beyond
compliance and establish governance structures that
provide relevant support to the decision-makers
when they face circumstances where moral consid-
erations are in tension with economical and strate-
gic goals.
This chapter identifies three knowledge bases for
ethical decision-making in organizational project
management. Project managers and other decision-
makers can build a foundation for responsible judg-
ments and decisions on knowledge about (1) ethical
principles and theories, (2) moral psychology, and
(3) ethical communication climate. From (1) they
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can adopt tools to analyze ethically challenging
situations, while (2) explains how both character
and circumstance dimensions affect conduct, and
also how processes of moral neutralization can
remove initial moral dissonance experienced by
decision-makers, and (3) brings attention to how
organizations can encourage individuals to voice
their moral convictions and concerns in constructive
ways. This chapter explores the three knowledge
bases and their contributions to sound ethical
decision-making in organizations.
Ethical principles and tools
Ethics can be defined as a systematic approach to
issues regarding what is morally right and wrong,
permissible, obligatory, and forbidden in human
interaction (Kvalnes, 2015, p. 11). In an organiza-
tional project context, ethics offers conceptual tools
and principles with which to analyze concrete
situations where the interests of stakeholders may
conflict, and the decision-maker needs to prioritize
between competing moral considerations.
Originally, ethics and morals are the Greek and
Latin concepts for what is acceptable and required
human behavior, but in recent literature and com-
mon language use, they have gradually come to
signify different phenomena. Morals are seen as
the personal and common beliefs about right and
wrong, adopted through upbringing and social
interaction (Goodpaster, 1992, p. 111; Buchholz
and Rosenthal, 1998, p. 4); ethics is defined as the
discipline of systematic thinking about right and
wrong, providing language and concepts for analyz-
ing the moral dimensions of a situation that calls
for a decision.
Decisions about right and wrong in organiza-
tional project settings can be based on moral
intuition and gut feeling, or on ethical analysis.
285
 286 Øyvind Kvalnes
This distinction mirrors the one Kahneman (2011)
draws between fast and slow thinking, or system 1
and system 2 decision-making. As in the more gen-
eral perspective, decision-makers need to find
a balance between quick and intuitive responses,
and more thoughtful and analytic responses to
challenging situations. Moral intuitions can be
flawed and misguided, and may stand in need of
being corrected through a more reflective approach,
but that activity can be impracticable in that it can
significantly slow down the decision process.
Finding a reasonable balance between morals and
ethics in projects is required in order to establish
a foundation for responsible decision-making.
Some of the most common ethical issues
experienced in projects fall into three categories
(Müller et al., 2013, pp. 35–36). Transparency
issues occur in connection with decisions about
the extent to which one should share information
and report about project performance issues.
A decision-maker may fear that openness can
lead to project termination or other dramatic
consequences and believe that current schedule
problems can be best handled internally,
without interference from concerned stake-
holders. Relationship issues emerge both intern-
ally between colleagues and team members and
also in the interaction with suppliers, customers,
and authorities. Closeness to other stakeholders
may raise the risk of creating real and apparent
bribery and corruption instances. Optimization
issues arise from questions such as: whether to
optimize projects in line with company or project
manager’s interests, or in line with current quality
standards or others that are within reach. The
three categories do not cover all ethical issues in
projects, but can serve to identify and distinguish
between the most relevant ones.
In encountering ethical issues, a decision-maker
can engage in fast and intuitive responses, or slow
and analytic ones. For the latter, the discipline of
ethics offers principles, concepts, and questions that
can guide the process. Within ethics, we can
follow Müller et al. (2013) and distinguish between
three orientations, emphasizing process, outcome,
and character, respectively.
Process orientation in ethics builds on the moral
philosophy of Immanuel Kant and introduces rules,
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maxims, norms, and principles to govern conduct
(Kant, 1998). Common labels for this orientation is
deontology and duty ethics. It identifies particular
moral obligations that individuals and organizations
have toward each other, and that are more or less
negotiable. Kant sought to establish absolute moral
duties and principles to govern conduct, while Ross
(1930) introduced a concept of prima facie duties to
the process-oriented tradition. These are always
contingent upon aspects of the situations and never
absolute. Their importance and relevance can differ
with the circumstances, although they do express
a concern about the quality of one’s decision and
behavior, a process concern.
Outcome orientation in ethics is also called con-
sequentialism or utilitarianism, and is founded on
eighteenth- and nineteenth-century philosophical
contributions from Jeremy Bentham (1970) and
John Stuart Mill (2002). It defines right conduct in
terms of the alternative likely to produce the best
outcome overall for all stakeholders and applies
cost-benefit analysis on behalf of the community
of all stakeholders. The decision-maker should
prioritize and act with an aim to maximize the
common good. In a project management setting,
this means to give equal weight to the interests and
preferences of all stakeholders, and identify the
alternative most likely to produce the best overall
satisfaction of these.
The process and outcome orientations are in
conflict in situations where the best overall out-
come for all stakeholders depends on the violation
of some moral norm or requirement held high from
a process perspective. The outcome-oriented
decision-maker will typically be willing to
sacrifice the interest of a minority, in order to
serve the interest of a majority. Process orienta-
tion, on the other hand, offers moral protection to
individuals and groups. Each has human dignity
and the right to respectful treatment, according to
this tradition of thought. Applied to transparency
issues, the process view will be that honesty
and truthfulness should be the guiding norm for
decisions, even in situations where the optimal
outcome from a common good perspective is
more likely to occur if the decision-maker hides
information from particular stakeholders.
A process view on bribery is to deem it morally

unacceptable, even in situations where a small
bribe in a country where such acts are common-
place is what appears to promote the common
good. In a range of circumstances, the recurring
pattern is that process orientation holds the prin-
cipled and respectful quality of one’s conduct to
be more important than what results from it, while
it is the opposite with outcome orientation.
The former ethical orientation rejects the idea
that the common good end justifies the means,
and the latter embraces it.
Character orientation is the third ethical alterna-
tive, and focuses on moral virtues like honesty,
integrity, and courage, and how we can develop
and nurture them. It stems from classical virtue
ethics, as developed in antiquity by Plato (2000)
and Aristotle (1984). Their ethical theories guide
action to a lesser degree than deontology and
utilitarianism, in that they focus on how individuals
can develop a stable disposition to do the right and
appropriate thing under given circumstances. Virtue
ethics addresses questions of right and wrong in
particular contexts indirectly, by first asking what
constitutes a person of moral virtue, and then
inquiring about what that person would do in those
contexts. In recent decades, empirically oriented
research contributions in moral and social psychol-
ogy have raised doubt about the viability of the
character orientation, highlighting how circum-
stances can be more predictive of conduct than
features of the decision-maker’s character. That
research development is particularly relevant for
the establishment of an ethics platform for organi-
zational projects, and will be explored in further
detail in the next section.
Both process and outcome orientations value
consistency in decision-making. They accept the
traditional ethical principle of the Golden Mean:
Do unto others what you want them to do to you,
although interpretations and guidance from that
principle can be markedly different with the two
orientations. Kant’s consistency formulation of the
categorical imperative claims that you should act
only according to the maxim by which you can at
the same time will that it should become a universal
law (Kant, 1998, p. 422). The idea that our decisions
and acts are morally right only to the extent that we
can accept that they become the norm for all others
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Ethics in Projects 287
who face similar situations also resonates with an
outcome-oriented or utilitarian perspective. It is in
the concrete interpretation and application of
the principle that they will diverge, most notably
in the evaluation of respect and openness.
The requirement of consistency is nevertheless
a common platform, and one that is at the core of
an ancient ethical principle commonly named the
principle of equality (Kvalnes, 2015, p. 33; Kvalnes
and Overenget, 2012, p. 66):
Equal cases should be treated equally. A difference
in treatment requires that there is a morally relevant
difference between the two cases.
Equipped with this principle, a decision-maker can
analyze concrete situations with the aim of reaching
a conclusion about what to do. It is a formal princi-
ple, neutral with regard to what actually counts as
a morally relevant difference. “That would be
lying” is considered a sufficient reason for not
going ahead with an option in the process tradition,
while “that would lead to a better overall state of
affairs” would count as an argument for being
untruthful in the outcome tradition.
The principle of equality encourages a clarifica-
tion of where to draw the line between gifts and
bribes, white and black lies, proper and improper
advantages given to other stakeholders, and so on.
From the outset, we can treat all cases where one
person receives something from another as an
acceptable transaction. Then we know that some
of these instances are unacceptable, in that the
giver attempts to affect a particular process in his
or her favor, at the expense of other stakeholders
who have an equally strong case for getting priority.
The principle of equality demands a concise
demarcation line, and helps us to identify exactly
what we need to know in order to determine whether
we should say “yes” or “no” to the object on offer.
If we are the givers of the object, is it appropriate
and right to offer an object of this kind to that person
or organization, at this point in time?
Ethics is one significant dimension of decision-
making in organizations and projects, but it should
not be treated in isolation. One decision-making
tool that aims to place ethics in context is the
Navigation Wheel (Kvalnes and Øverenget, 2012;
Kvalnes, 2015).
 288 Øyvind Kvalnes

Is it legal?

LAW
Can it be justified? Is it in accordance
with our values?
ETHICS IDENTITY

What do
you do?

ECONOMY MORALITY
Is it in accordance Is it right?
with business objectives?
REPUTATION

Does it affect our goodwill?

Figure 19.1. The Navigation Wheel (Kvalnes and Øverenget, 2012; Kvalnes, 2015).

The main point of the Navigation Wheel is to
serve as a reminder of six potentially important
dimensions of a situation. It does not provide
a ranking of these dimensions, and so leaves it
open which of them should have priority under
circumstances where the answer to one of the ques-
tions is yes, and to another is no.
The set of questions presented in the Navigation
Wheel belongs to a family of such analytic sets,
from the simple ones such as Blanchard and
Peale’s (1988): “Is it legal, is it fair, can I defend
it?,” or Rion’s (1990) “Why is this bothering me? –
Who else matters? – Is it my problem? – What is
the ethical concern? – What do others think? – Am
I being true to myself?” More complex approaches
are the 8-step list of Laczniak and Murphy (1985),
the 12-step list of Nash (1989), and the 10-step list
from the Markkula Center of Applied Ethics
(2015).
Leaders and employees in organizations and pro-
jects can practice applying ethical principles to con-
crete cases that are likely to occur in their
professional work. Ethical training provides an
opportunity for participants to think through ethical
challenges and to consider what are good and bad
justifications in such situations. To make the ethical
training realistic, the participants can engage in
role-play, where they have to reach a conclusion
and defend it in the face of opposition from other
stakeholders (Brown, 1994). The activity can pre-
pare the participants for tough decisions that they
are likely to face in real situations at work.
Ethical theory provides conceptual resources to
analyze moral dilemmas, that is, situations that
require a choice between two options that in some
sense are or seem to be equally undesirable or
unsatisfactory (Kvalnes, 2015 p. 12). The decision-
maker has to give priority to one moral value over
another. Moral dilemmas “arise when, faced with
a difficult situation (e.g., fair treatment for some
versus job security for others), two or more such
values conflict in the perception of a decision
maker, or when one is assessing another’s moral
choice” (Maclagan, 2003, p. 22). The person who
is facing a dilemma must decide with moral duty to
prioritize, and “whichever action is taken it will
offend an important moral value” (ibid., p. 23).
A different kind of challenge is one where the
decision-maker clearly perceives and knows what
the right course of action will be, but is tempted or
ordered to do something else. It would be mislead-
ing to call these situations moral dilemmas, since
they consist of a choice between right and wrong.
As such, we can name them false dilemmas

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(Kvalnes, 2015, p. 15). They do not pose a test of the
decision-maker’s ability to reason well and identify
the proper way to prioritize between moral values.
Instead, they challenge the decision-maker’s
character or ability to do the morally right thing,
even under pressure to act wrongly. The knowledge
base for understanding human responses to situa-
tions of that kind is moral psychology, which is the
topic of the next section.
Moral Psychology
One common approach to misconduct in organiza-
tions and projects has been to see it as result of the
bad character of the decision-makers. This character
orientation stems from the virtue ethics tradition in
moral philosophy. It explains wrongdoing in pro-
jects in terms of bad or weak character.
The wrongdoers have typically found themselves
in a position where it has been possible to give
priority to their self-interest ahead of some ethically
important consideration, like honesty, respect, or
loyalty. Their wrongdoing is interpreted as evidence
of a weakness of character, a failure to do the right
thing in ethically challenging circumstances.
A person of virtue may in a similar situation experi-
ence the temptation to give in to self-interest and
sacrifice some moral consideration, but has the
moral strength not to do so. The virtuous person
has a stable disposition to withstand temptation and
respond adequately to the situation at hand.
According to this character approach, then, the
most effective way to avoid wrongdoing in projects
is to give responsibility to people of strong charac-
ter, and to limit the scope of action for individuals
with weak character. In practical settings, it may be
difficult to distinguish between people of good and
bad character, but that should nevertheless be the
main target in organizations that seek to avoid moral
wrongdoing and scandal, according to the character
approach.
Authenticity has become a central and unifying
concept for a range of contributions that seek to find
adequate responses to wrongdoing in organizations.
Researchers and practitioners have identified
authentic leadership as a significant component in
organizational settings (Gardner et al., 2011;
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Ethics in Projects 289
Hannah et al., 2005; Hannah et al., 2011;
Walumbwa et al., 2008; Kiel, 2015). An authentic
leader is a person with a particularly strong dis-
position to do the right thing, and not give in to
external pressure or to temptation to prioritize
short-term self-interest. We can expect responsi-
ble and sound decisions on behalf of the project
and the organization from someone who is
strongly committed to live and act in accordance
with a set of common and shared values. Again,
it seems that the rightness or wrongness of the
decisions taken within the organizations or project
depends on the strength or weakness of character
found in the decision-makers.
The character orientation has gained support in
the aftermath of ethical scandals in organizations,
leading to calls for authentic leadership, but experi-
mental research in social and moral psychology
provides reasons to be skeptical of it. One classical
experiment set out to test the helpfulness of
theology students who had prepared a brief talk
about the Good Samaritan story from the Bible
(Darley and Batson, 1973). They were individually
asked to walk from one part of campus to another, to
give their talk about the Good Samaritan. On their
way to that location, they all encountered a person
in pain, needing help. The researchers wanted to test
whether it made a difference to the students’
responses to this situation that they felt they had to
hurry to their assigned location, or not. One-third of
the students were told that they needed to go fast in
order to be at the location on time, one-third was
told that they would get there on time if they moved
now, and one-third was instructed that they had
plenty of time to get there. The researchers’ assump-
tion was that if character is the main driver of
behavior, the difference in time frames should
not make a significant difference to the helping
behavior of the students. Character orientation,
then, would predict that there would be little differ-
ence between the students in the three groups.
The outcome of the experiment, however, was that
10% of the students in the first group, 45% of
the students in the second group, and 63% of the
students in the third group offered to help the person
in pain. There were considerable differences
between the groups, then, and the results provided
reasons to reconsider the character orientation.
 290 Øyvind Kvalnes
Since the Good Samaritan experiment, research-
ers have designed a range of similar experiments to
explore further the balance in predictive power of
character and circumstances (Alderman, 1972; Isen,
1987; Baron, 1997; Mazar et al., 2008; Ariely,
2012). The conclusion from this research tradition
is that the degree to which people tend to be honest,
helpful, and loyal in given situations, depends more
upon circumstances than on character (Doris, 2002).
The assumption that we can distinguish sharply
between people who are good or bad, loyal or dis-
loyal, helpful or unhelpful, honest or dishonest has
been weakened from exposure to experimental
research in moral and social psychology.
The practical implications of the experimental
approach found in this research stream, is that
character orientation and a call for strong,
authentic leadership builds upon a dubious
assumption about firmness and stability of char-
acter. Circumstances, in the shape of incentives,
motivational structures, time restrictions, and
other situational dimensions, appear to play
a more significant role in affecting decision-
making and conduct than virtue ethics acknowl-
edges. Governance structure A can yield different
responses to ethical challenges in a project than
governance structure B, even if the individual
decision-makers are the same. The findings from
moral psychology are significant for organizations
that have encountered disloyalty and other kinds of
wrongdoing in their ranks. The initial, character-
oriented response can be that the wrongdoers need
to be removed and substituted with people of stron-
ger moral fiber. The circumstance approach, on the
other hand, will warn against the solution of kick-
ing some people out and putting new people in,
since that leaves intact the structures that created
room for wrongdoing in the first place.
If circumstances are likely to be the prime drivers
of misconduct in projects, then revising them
should have precedence over bringing in fresh
faces.
Moral psychology is one of three knowledge
bases that can serve as a foundation for responsible
decision-making in organizational project settings,
partly by providing a balanced account of how
character and circumstance affect decisions and
behavior, and partly by offering explanations of
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the mental and social processes that can lead to
wrongdoing. Studies of wrongdoing in business,
academia, sports, and other fields of activity tend
to expose a common three-step pattern (Kvalnes,
2014; Kvalnes, 2015, pp. 77–90):
1. The decision-makers face an option to act
against their moral convictions, and they
experience moral dissonance, a mismatch
between what they think is morally right, and
what they are tempted or ordered to do.
2. The decision-makers engage in moral neutrali-
zation, an activity where they attempt to con-
vince themselves that the option in question is
morally acceptable after all.
3. Once the moral dissonance has been removed
through a process of moral neutralization, it
opens up for the first act of wrongdoing, and
for repetition and a normalization of question-
able behavior.
The criminologists Sykes and Matza (1957)
have provided a theoretical framework for analyz-
ing moral neutralization, a process where the
decision-makers seek to overcome initial moral
dissonance by finding justifications for going
ahead with the dubious option. Ribeaud and
Eisner (2010) have suggested a broader application
of this framework, while Heath (2008) has outlined
how it is relevant for understanding unethical con-
duct in business. The processes identified in the
framework involves the use of the neutralization
techniques of denying responsibility, injury, and
victim, condemning the condemners, and appeal-
ing to higher loyalty (Sykes and Matza, 1957).
Donaldson (2012) has discussed how the financial
institutions’ selling of structured products to their
clients in the period leading up to and creating the
financial crisis in 2008 followed a pattern of this
kind. He explains the process as an example of how
“bad practices can become institutionalized, and
initial queasiness gives way to industry-wide
acceptance” (Donaldson, 2012, p. 6).
Studies in moral psychology suggest that miscon-
duct in organizations is not so much a result of bad
character in the decision-makers, but rather the
outcome of circumstances where people have
experienced moral dissonance, and have been
encouraged or forced to neutralize that initial

discomfort. Organizations that are serious about
preparing their leaders and employees to behave
responsibly in ethically challenging situations,
should learn from this research and look for
practical ways to counter internal attempts at
moral neutralization. It is likely that these situations
can occur anywhere, and that a focus on strength
of character is not sufficient to avoid a gradual
weakening of the resistance toward wrongdoing.
Instead, the emphasis could be placed on how
one can voice moral concerns and provide critical
feedback to neutralization attempts from one’s
own colleagues and leaders. The extent to which
people are encouraged to express their moral con-
victions at work will have a major impact on the
kinds of activities and behaviors that occur in the
organization. The third and final knowledge base of
ethics in organizational project settings addresses
this issue.
Ethical Communication Climate
A crucial period in a project’s history can be one
where things are not going according to plan, and
there is a suggestion on the table to save time and
resources and bring the project back on track by
taking a morally dubious shortcut. The task may
be to create a product that satisfied some specific
low pollution criteria, and multiple attempts to do
so have been unsuccessful. The specific and
uncompromising order from top management is
that failure is not an option. In response, a group
of project workers may explore the possibility of
making adjustments that will make it look as if the
product meets the criteria, even though in reality it
does not. It is technically possible to implement
such a solution, but the option creates moral dis-
sonance among the project members, as they
would have to act against their moral convictions
in order to implement it. Under these circum-
stances, there may be attempts to engage in
moral neutralization, in order to make the initial
dissonance go away. Whether those attempts
succeed or not, depends on the communication
climate in the project, and the extent to which
people are able to voice their concerns and
challenge the neutralization strategies.
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Ethics in Projects 291
Organizations that take ethics seriously need to
establish a communication climate where the nor-
mal response for an employee who has moral mis-
givings about a proposed course of action is for
him or her to speak up and address the issue
directly. When deciding to voice a moral concern,
the employee should ideally not experience fear
over what comes next in terms of possible negative
sanctions from colleagues and the leadership.
Moral muteness (Bird, 1996; Bird and Waters,
1989) occurs when people are reluctant to speak
their minds in moral matters. “Many people hold
moral convictions yet fail to verbalize them. They
remain silent out of deference to the judgments of
others, out of fear that their comments will be
ignored, or out of uncertainty that what they
might have to say is really not that important”
(Bird, 1996, p. 1). Confronting a leader or collea-
gue who is employing neutralization techniques to
make moral dissonance go away might also not be
a smart career move. When an individual takes the
risk of speaking up against such neutralization
attempts, all eyes will be on that person, and on
how it affects his or her career development. Any
negative development is likely to be interpreted as
a sign that the top management does not appreciate
or welcome dissenting voices.
Gentile has developed the concept of Giving
Voice to Values (GVV) as a method for individuals
at work to stand up for their moral beliefs and
values, even when they are under pressure from
colleagues, leaders, customers, and other stake-
holders not to do so (Gentile 2010). GVV has gen-
erated considerable research interest (Cote et al.,
2011; Chappell et al., 2013; Edwards and
Kirkham, 2014), and inspired practitioners in orga-
nizations. It encourages people to overcome moral
muteness and speak their minds when they observe
decision-making and conduct that goes against their
moral values. It also provides concrete action plans
and scripts for people who want to become better at
giving voice to their values at work. In many ways,
GVV seems designed to address the need
to intervene when colleagues engage in moral
neutralization and gradually become blind to
moral aspects of their own behavior.
One weakness in the GVV approach is that it
appears to be essentially monological. The subtitle
 292 Øyvind Kvalnes
of Gentile’s book is “How to speak your mind when
you know what’s right” and the tone of actually
knowing what is right is assumed in the discussion.
Gentile offers practical advice to individuals
who clearly see how things stand, and what it will
mean to stand up for one’s values in the situation,
and need to go from conviction to enactment.
In organizational settings, people can realistically
find themselves in situations where they do not
know what is right and have doubts about how to
interpret what is enfolding in front of them. They
somehow need to give voice to that doubt and
not remain passive. The starting position of being
a person who knows full well what is right and true
does not invite dialogue or attention to how
other people see the situation. It is not the position
of listening to other perspectives and being open
to revise one’s beliefs. An alternative perspective
can be to give voice to doubt rather than value,
since uncertainty and doubt can be a more construc-
tive starting point for conversations about right
and wrong than one where you have made up your
mind in advance. One frame of reference can be that
of Socratic dialogue, where the aim is to engage in
inquiry and questioning in order to reach consensus
on an issue. The philosophers Nelson (1949) and
Heckmann (1981) have suggested a design inspired
by the idea of Socratic dialogue, where search for
truth in answer to a particular question is undertaken
together. Brinkmann (2015) proposes a similar
approach as a catalyst in conversations about right
and wrong in organizations. In essence, the Socratic
design invites respect for the myriad perspectives
that deserve a hearing when we try to reach
a common understanding in a particular situation.
Even in situations where there appears to be a need
to challenge moral neutralization, the initiator
would be well advised to remain open to the possi-
bility that he or she has misunderstood the situation
or failed to grasp important aspects of it.
This chapter has identified three knowledge
bases for ethical decision-making in organizational
project management. Responsible judgments and
decisions can build on knowledge about (1) ethical
principles and theories, and the three main
orientations of process, outcome, and character.
The process orientation emphasizes the quality
of the decision-making in terms of treating
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stakeholders with respect and human dignity. With
a foundation in Kant’s moral philosophy, it centers
on the moral duty never to treat other people as mere
means, but always also as ends in themselves.
An outcome-oriented ethics, on the other hand,
opens up for putting that moral duty of respect
aside, if it can serve to promote the common good
more effectively. In project settings, the dissonance
between these two normative perspectives
occurs when the best overall outcome can only be
realized by temporarily compromising moral
duties to be honest and respectful toward others.
The character orientation does not offer any
solution to the tension between the other two orien-
tations, but draws attention to how stable and
steadfast dispositions to follow particular moral
principles can be valuable. An organization
can put their leaders, managers, and employees
through ethical training and make them familiar
with these ethical orientations and their links
to everyday practices in projects. This activity
can provide the practitioners with a language in
which to analyze, discuss, and justify their
decisions.
Abilities to provide ethical analysis need to be
combined with (2) knowledge concerning moral
psychology, partly in the sense of creating aware-
ness of the limitations of the character orientation,
and how circumstances affect decision-making
and human behavior, and partly in exposing the
processes that can go from moral dissonance,
through moral neutralization, to a normalization
of questionable behavior. Leaders and employees
who have been through ethical training may
nevertheless be vulnerable to incentives to meet
project goals by engaging in some form of moral
wrongdoing.
It is in this context that (3) knowledge about
the ethical communication climate can make
a difference to how processes develop in a project,
and the extent to which neutralization attempts are
challenged or encouraged. It is in concrete situations
where morally dubious alternatives are on the table
that the organization and project management are put
to the test regarding the three knowledge bases of
ethics. All three can contribute to a systematic ana-
lysis of the situation at hand and to awareness regard-
ing the responses of moral misgivings and

dissonance that can either remain and cause
a rejection of the alternatives, or disappear through
intricate processes of moral neutralization.
Summary: The main recommendation from this
chapter is that decision-makers in organizational pro-
ject management settings should turn to (1) ethical
principles and theories, (2) moral psychology, and (3)
theories about voice and ethical communication cli-
mate in order to prepare for ethical dilemmas and
challenges at work. These three knowledge bases
can serve as a foundation for responsible decision-
making and behavior in organizational projects. All
three are important, since decision-makers well
trained in ethical analysis may still become involved
in wrongdoing, due to factors explained in the domain
of moral psychology, and the people who are active in
projects need to experience that it is normal to voice
one’s moral concerns at work if they are to do it
themselves.
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 CHAPTER
20
Multilevel Value Creation
in Projects, Programs, and Portfolios
Results from Two Case Studies
KARYNE ANG and CHRISTOPHER BIESENTHAL
Introduction
The management of value is an increasingly impor-
tant process to meet stakeholder expectations on
multiple organizational levels. Existing project
management research focuses primarily on a single-
dimensional perspective of value creation, such that
value is either addressed from an organizational or
project perspective. From a project portfolio man-
agement (PPM) perspective, a key goal is to max-
imize strategic value across the portfolio to ensure
its alignment with organizational strategies.
Therefore, seeing the multilevel nature of organiza-
tions dealing with multiple projects, programs, and
portfolios is to achieve its strategic intent, the
single-dimensional approach through typical pro-
ject management approaches often fails to capture
the complexity of value management in a strategic
organizational environment. The multiplicity of
influences and value expectations of different sta-
keholders may potentially lead to complex decision
conflicts, dilemmas, compromises, and inconsisten-
cies in project, program, and portfolio decisions.
This chapter introduces value as a multilevel,
multidimensional concept and explores the mechan-
isms for dealing with value interdependencies
across different organizational levels and stake-
holder groups, whose expectations of value are
often contradicting. It discusses the dimensions of
values (i.e., short-term and long-term strategic
value, tangible and intangible) occurring at the
micro-, meso- and macrolevels, represented by the
project, program, and portfolio levels. It presents
two case studies of organizations in two different
contexts – the public and private sectors, to demon-
strate how value is cocreated across these distinct,
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yet interconnected, organizational layers.
The authors argue that project, program, and
portfolio value management in organizations is
a reciprocal and interdependent process in which
macrolevel values (portfolios) shape and are
shaped by the values at the meso- (program) and
micro- (project) levels. As such, value management
within organizational project management (OPM)
becomes an iterative process that includes a sense-
making approach, in which the final values for
different stakeholders emerge and evolve during
the course of the project, program, and portfolio.
Value creation is the ultimate goal of any project
in an organizational setting and therefore the key-
stone that brings together the different topic areas
discussed in this book. In particular, determining
what value means for any stakeholder across the
different organizational levels should be part of
the strategizing process. It is ultimately the stake-
holders that determine what value means, when
value is created, and how organizations create
value for themselves and for other stakeholders
across the different organizational levels using an
iterative process. As such, value is an important
concept that requires further attention and a vital
new direction in OPM.
A Multilevel Perspective
The project management literature largely investi-
gates organizational phenomena using a single level
of analysis (e.g., individual, team, business unit,
organization). While this is appropriate for many
inquiries, we argue that when investigating organi-
zational value and value creation, a multilevel
perspective is imperative to capture the full
295
 296 Karyne Ang and Christopher Biesenthal
complexity of underlying practices and interdepen-
dencies. A multilevel perspective further helps
us develop a more contextual and holistic picture
of organizational value creation, which accounts
for different agendas, objectives, and practices
(Sydow, Lindkvist, & DeFillippi, 2004;
Windeler & Sydow, 2001).
In most organizations, multiple levels coexist,
such as the project (micro), program (meso), and
portfolio (macro) levels. Despite their different
functions, the levels have a certain degree of
interdependence (Brady & Davies, 2004;
Keegan & Turner, 2002; Larson, 2004). Project-
to-portfolio interdependencies are increasingly
acknowledged and understood as important
(Collyer & Warren, 2009; Dahlgren &
Söderlund, 2010; Elonen & Artto, 2003; Rungi,
2010; Stummer & Heidenberger, 2003). These
interdependencies, particularly across projects,
might include resource interdependencies
(where scarce resources are shared by more than
one project), outcome dependencies (the out-
comes from another project is needed), market
or benefit interdependencies (complementary or
competitive effects), knowledge dependencies
(capabilities and knowledge gained through
another project need to be incorporated in the
subsequent projects), and financial dependencies
(Blau, Pekny, Varma, & Bunch, 2004; Eilat,
Golany, & Shtub, 2006; Verma & Sinha, 2002).
An area that that is seldom explored in the litera-
ture is the value dependencies in OPM across
different organizational levels. An exploration
of value concepts from the literature provides us
with a launching point in understanding what
value dependencies might mean for OPM.
Concepts of Value
Value concepts are well recognized and applied in
various disciplines including project management
(e.g., Kelly & Male, 1988; Prasad, 1997; Thiry,
2002), marketing management (Bradley, 1995;
Prahalad & Ramaswamy, 2004; Ulaga & Chacour,
2001), portfolio and corporate inventory manage-
ment (Maizlish & Handler, 2010; Michalski, 2008),
investment management (which is different from
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PPM) (Irani, 2002), intellectual capital (Petrash,
1996), and strategic management (Kaplan &
Norton, 2001; Male, Kelly, Gronqvist, & Graham,
2007; Moore, 1995; Stoker, 2006). These disciplin-
ary studies are focused on devising a systematic
process for improving productivity through
value engineering and by focusing on economic
and customer value in order to gain competitive
advantage (Kelly & Male, 1988).
As a strategic planning process where projects
are linked to business strategy, Winter and
Szczepanek (2008) studied the various foci of
value at three different levels of a business; namely,
at the strategic group level (shareholder value);
business unit, program or portfolio level (provision
of customer service, unit sales, and profits); and
project levels (improving service and quality).
They argue for the move away from both the
traditional product-centric view (e.g., capital assets,
systems, or facility) and the “traditional project
management triangle” of specifications, cost, and
time to a value-centric perspective (e.g., business
strategy, organizational effectiveness, and
stakeholder benefit realization) (Winter &
Szczepanek, 2008, pp. 97–98). They also imply
a representational shift from singular to multidisci-
plinary projects and emphasize the importance of
considering multiple perspectives in project man-
agement. The move from a product- or goods-
centric view to a service-orientated view is also
posed by Vargo and Lusch (2008), who apply
a service-dominant logic perspective in the market-
ing discipline to argue that value rather than pro-
ducts, and networks rather than dyads, could shift
the way services, processes, and intangibles are
viewed. The case for a value-centric perspective
in organizations is equally important for OPM
and PPM, where a strategic perspective of OPM
needs to be orientated around encapsulating the
multiple perspectives and expectations of different
stakeholders. It implies the need to engage with
multiple stakeholders in a relevant and useful way
to ensure that value is identified, managed, and
optimized. Male et al. (2007) posit that value can
be managed following a process-driven, structured,
consultative inquiry methodology. The discussions
highlight the necessity for a participatory, multi-
disciplinary representative group of people working

together to establish and improve value in the pro-
ducts, services, projects, programs, administrative
processes, organizations, and systems.
Dimensions beyond Direct Financial Value
The value generated by projects has long been
understood to be more than just the direct financial
value. Thiry (2004) states that there is a need to
differentiate between direct and indirect values:
“Direct values are financial impacts directly related
to the choice of the alternative. Indirect values are
elements valued by stakeholders, and especially
decision makers that have may have an economic
outcome beyond direct economic value” (p. 247).
With regard to indirect value, when decision
makers take into account value beyond economic
value, they need to make trade-offs between various
elements of value (Thiry, 2004).
Contemporary researchers are actively working
on extending the understanding of value for pro-
ject portfolio environments (Killen, du Plessis, &
Young, 2012; Kopmann, Kock, Killen, &
Gemuenden, 2015; Martinsuo & Killen, 2014).
Conceptual and developing projects making their
way through the portfolio through a selection and
prioritization process need to be considered in
terms of the potential value they may generate in
their life cycles, even before a project commences.
For example, value in a portfolio can come from
current and developing projects in the organiza-
tional pipeline (Delerue, Drouin, Sicotte, & Petit,
2015), such as the potential relational networks,
organizational reputation, knowledge, and learn-
ing that could be generated through various pro-
jects at various points of the project life cycle, even
from incomplete or terminated projects (Ang,
Killen & Sankaran, 2015). In the case highlighted
by Ang et al. (2015), the value generated by
a project initially perceived as “unsuccessful”
was acknowledged as pivotal to future investment
decisions for other projects in the organization.
Moreover, projects and programs can be interde-
pendent (Archer & Ghasemzadeh, 1999; Rungi,
2010), and some projects lag in time in the way
they generate long-term contributions to the port-
folio. When multiple stakeholders influence
value determination from different directions,
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Multilevel Value Creation in PPPM 297
value may, in practice, emerge from different
levels of an organization; for example, from the
bottom up, that is, from the micro (projects) to the
meso (program) and macro (portfolio) levels.
We therefore define multilevel value interdepen-
dencies in OPM as the value of a project (micro),
program (meso) or portfolio (macro) that is
dependent upon or impacted by value generated
from other micro to macro organizational ele-
ments including the dynamics of their respective
stakeholders.
Value in the Eyes of the Beholder
Value is a complex and subjective phenomenon –
managers need to deal with multiple stakeholders
who have competing, conflicting and often incon-
sistent interests and value expectations. Different
stakeholders interpret value differently across
organizational levels; it is not a fixed entity, but
rather varies in the ways it is perceived by each
stakeholder, and in how each individual’s value
perceptions are translated into practice. This
notion is also supported through the idea that orga-
nizational contribution can be a subjective con-
struct embedded in the values and preferences of
stakeholders (Aubry, Hobbs, & Thuillier, 2007).
Since the alignment of stakeholder expectations in
terms of value creation is crucial when managing
projects, programs, and portfolios in a multilevel
environment, stakeholder theory serves as a good
starting point to investigate this aspect of organi-
zational life.
Stakeholder theory is based on a socially oriented
perspective and argues that an organization
should be managed in the best interest of all its
stakeholders, including all external and internal
stakeholders across different levels (i.e., micro to
macro level) (Blair, 1996; Jones & Wicks, 1999).
Stakeholders are any “identifiable group or individual
who can affect the achievement of an organization’s
objectives, or who is affected by the achievement of an
organization’s objectives” (Harrison & Freeman,
1999, p. 91).
We postulate that value management in organiza-
tional project management is a reciprocal and
interdependent process in which macrolevel values
shape and are shaped by the values at the micro- and
 298 Karyne Ang and Christopher Biesenthal
mesolevels through the management and engage-
ment of multiple stakeholders.
Stakeholder management is a continuous task of
balancing and integrating multiple relationships,
conflicting demands, and multiple objectives
(Freeman & McVea, 2001, p. 194) and is particu-
larly important in project portfolio management
with its multiple-stakeholder focus (Thiry &
Deguire, 2007; Winter, Smith, Morris, & Cicmil,
2006). In consideration of the relational interdepen-
dencies from the microproject to the macroportfolio
levels of the organization, an organization can thus
be viewed as interdependent relationships among
primary stakeholders (Chakravarthy, 1986;
Clarkson, 1995; Donaldson & Preston, 1995). The
mechanisms of stakeholder theory address the
diversity of stakeholders and their underlying objec-
tives and find a way to balance the different expec-
tations in an effective way. It is therefore crucial for
the managing project team to clearly understand
what outcomes the different stakeholders expect
from the project so that performance drivers can
be put in place (Biesenthal & Wilden, 2014).
A Case Study Approach in Exploring
Real-World Practice
We draw upon two practical and distinct case study
examples from a public and private (for-profit)
organization in Australia to highlight, compare,
and contrast scenarios of interdependencies of
values in order to demonstrate how value transcends
and works across the different levels in practice
with multiple stakeholder groups, whose
Table 20.1 Reference to Organizations, Interviewee Codenames, and Roles
Organizations and Departments
ASSET
ASSET – Maintenance (External Supplier)
ASSET – Engine (Agency, Internal Supplier and SE6
Customer)
FINANCE
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expectations are often contradictory. In the two
cases, in-depth exploratory interviews were con-
ducted with project, program, and portfolio mem-
bers, and their internal and external stakeholders.
Stakeholders are instrumental in the identification
and evaluation of project and portfolio value, and
are a primary source of information for the study.
These included project, program, and portfolio
members, decision-makers, and other key stake-
holders (including suppliers, senior executives,
staff, and consultants). To protect the anonymity
of the organizations and participants, references
made to specific industries, persons, or roles
have been generalized, adapted, or de-identified.
The participant roles and codenames can be
found in Table 20.1. The data was analyzed to
identify themes, patterns, and relationships sur-
rounding dependencies in projects, programs,
and portfolios with a particular focus on value
and stakeholder relationships at the various
levels. The interviews contributed thick descrip-
tions to the multiple case studies and allowed for
depth of understanding. To strengthen the face
validity and credibility of the research (Patton,
2002), the participants’ views and experiences
are evidenced through extracts from the raw
data (Rice & Ezzy, 1999).
Synopses of case study
organizations – ASSET and FINANCE
This section commences with synopses of the
two case organizations including their approach to
managing multiple projects, programs, and portfo-
lios. We discuss the themes found in the cases
Interviewee Codenames Roles
SE1, SE2, SE3, SE4, E5 Senior executive-Standards, Senior executive-
Unit, Executive-Unit
PrD, TS, PM Projects Director (Consultant), Technical
Supervisor, Project Manager (Engineer)
Senior executive, Project Manager, Project
Recipient (multiple roles)
PoD, ELC, HoP1, HoP2 Portfolio Director, External Lead Consultant,
former Head of Program Delivery, Head of
Program Delivery, Head of Program Delivery

pertaining to multiple interdependencies from the
project (i.e. micro) to the portfolio (i.e. macro)
levels of the organization.
ASSET is an independent unit established
within a state-owned public organization in
Australia. The unit is responsible for providing
asset stewardship through developing and updat-
ing its standards and industry documentation,
developing engineering governance and frame-
works that support related industries in delivering
assurance in areas of public asset design, delivery,
and management across a vast range of projects
and complexities. The state’s various public assets
are currently valued at A$104 billion. ASSET
introduced a new approach in integrating and
managing the network of projects, programs and
portfolios through a “Whole of Life cycle
Management of Assets” (WLMA) framework
that encapsulates systems thinking and multiple
interdependencies.
The framework is illustrated through a typical
gated process that appears sequential but is, in fact,
iterative. The stages in the gateway are interdepen-
dent and iterative as managers make sense of con-
siderations at the back-end and front-end of the life
cycle, for the short- and long term, in order to deliver
value across the asset portfolio to the various stake-
holders including the public taxpayer. In this frame-
work, projects are no longer commissioned in silos
but have to be considered in relation to other projects
in the pipeline for the “whole-of-life cycle” for the
asset. A significant change initiative incorporating
a change of mindset through the adoption of the
new framework is currently being driven by
ASSET across the various stakeholder organizations
involved with the state public asset of focus. Regular
engagement programs are held with internal and
external stakeholders (for example, with planning
units, project delivery teams, maintenance and opera-
tions suppliers, engineering service organizations,
and designers) to ensure that each stakeholder under-
stands their roles and accountabilities in the whole-
of-life cycle of the asset.
To provide several stakeholder perspectives,
this case includes a privately owned asset
maintenance organization (MAINTENANCE),
who is a key outsourced supplier of ASSET,
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Multilevel Value Creation in PPPM 299
and another independent public agency
(ENGINE) of the state-owned public organiza-
tion, who holds a shifting dual role in the projects
and portfolios as both the deliverer and receiver
of value depending on their position in the
ASSET life cycle at a given time. ENGINE
elaborates on this:
Sometimes we play different parts. Part of our link
with ASSET, is sometimes we can be the recipient of
a project. Someone at the higher level may commis-
sion somebody to go and do an improvement pro-
ject. We’re the receiving party. Other times, we
might actually do that work, and then our role
becomes different. We become the deliverer of the
project rather than the recipient of the project. That
ever-changing fluid landscape, as change has con-
stantly happened on the network, it’s constantly
switching to “am I deliverer of this, am
I a recipient of this?
The various stakeholders have different views
about what a project or portfolio entails.
MAINTENANCE, for example, uses the term “pro-
jects” when referring to streams of work or a series
in a program. They also term multiple projects
under “program of works” for a mix of projects
that also include other peripheral nonproject work.
Multiple projects in the organization are managed
under a Projects Director.
FINANCE is an Australian financial institution
established in the 1800s. The institution provides
consumer and business/commercial services in
Australia, New Zealand, and several Pacific
Island Nations including banking and insurance
products for consumer, business, and institutional
customers.
The business units of the organization are
structured as a hybrid around projects, programs,
and portfolios, as well as functional units.
The portfolios comprise different programs and,
within those programs, there are multiple projects.
The IT department functions in a matrix structure
and works across the different levels in the organiza-
tion. Within the organization, stakeholders had
slightly different conceptualizations of projects,
programs, and portfolios. The terms “projects-
programs” and “programs-portfolios” were often
used interchangeably.
 300 Karyne Ang and Christopher Biesenthal
One of the programs incorporates five portfolios
of work in the retail and business banking divisions
with a total portfolio value of A$350 million.
Meanwhile, another program is identified by size
and value as “one huge piece of work or many small
pieces of work” valued at around A$20 million.
When more than twenty programs valued at over
A$20 million need to be managed, it is identified as
a portfolio.
Another portfolio investigated in this case study
deals with regulatory change for the institution.
They fund, manage, and prioritize projects and pro-
grams in the organization dealing with regulatory
reforms. The portfolio consists of around thirty
programs that run for up to five years, with seventy
to ninety projects in total. Projects usually have an
operational and budgetary timeline of no more than
twelve months. The Regulatory Portfolio tends to be
managed on a top-down basis due to its links with
mandates, legislation, compliance, and stringent
financial regulations and policies.
An external lead consultant (ELC) commented:
Even in this organization, there were almost no
rules around whether you wanted to call some-
thing a project or program. You had projects
which were clearly programs, but because of the
funding arrangement they were continued to be
called a project. Others, because they wanted to
make it sound important, they called program, but
they were still being funded as a project.
We implemented guidelines and rules around
“Is it a project, a program, subportfolio, or
a portfolio?” Broadly, those rules are accepted
and followed.
Findings and Discussion: Mechanism
for Dealing with Value Interdependencies
The case studies provided us with fruitful insights
into the multidimensional nature of value in OPM
and the implicit interdependencies of values.
Since this chapter is primarily concerned with
the mechanisms for dealing with value interdepen-
dencies across different organizational levels and
stakeholder groups, we will discuss the main
mechanisms that emerged from our cases in the
remainder of the chapter.
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The focus of governance and optimization at
the various organizational levels
Project governance is concerned with the alignment
of the project with stakeholders’ needs or objec-
tives, making it a crucial factor to deliver value
across different organizational levels.
From the case studies, we found that at the
microlevel, individual project successes do not
always contribute to the overall success of the
program or portfolio. There can be a disconnect
between projects, whereby even if a project
appears to have been successfully completed, it
might not meet the stakeholder’s needs. It is
important to define and understand the intended
contribution of a project toward the bigger
picture, as commented by Senior Executive SE6,
ENGINE:
We don’t always define very well what it is that we
were setting out to do. You get to the end of the
project, and yes, you might have met the standards,
ticked the boxes. But, did you actually meet the
intent of what you were trying to do? The real
intent, we need to have it be properly defined . . .
This party, quite rightly is saying, I did everything
you asked me to do. I delivered as per the contract.
If they’re very focused on just meeting engineering
standards, we can end up with something that
doesn’t meet our needs, and we don’t necessarily
know what to expect, or we have to compromise, or
have additional costs.
The quote exemplifies that stakeholder interests
and intentions in projects and portfolios can trans-
cend beyond project deliverables. Expectations
that are of value to stakeholders can range from
purely financial objectives (e.g., return on invest-
ment) over political objectives (e.g., keeping
a campaign promise) to purely social objectives
(e.g., reputation).
The general view of FINANCE is that deliver-
ables are optimized at the project or microlevel,
while the business case is optimized at the program
level, and strategic objectives at the portfolio level.
In practice, FINANCE executives mentioned that
there were times when stakeholders from other
divisions external to the various portfolios exerted
influential executive power on decisions made

about project eligibilities, priorities and selection.
This also highlights the importance of being aware
of and understanding stakeholder interests and their
interrelationships in optimizing value across the
micro- and macrolevels. In addition to governance
mechanisms, interdependencies are impacted by
one’s position of power and influence, particularly
in attending to and aligning with key stakeholders
that can have an impact on an organization’s per-
formance, strategic value generation, and long-term
success (Jones, 1995).
Identifying and creating value at different orga-
nizational levels requires a good understanding of
the expectations, relationships, agendas, and
objectives residing on each of the levels, as well
as the interdependencies between those organiza-
tional levels. Many view the relationship between
strategy and projects as a one-way downward
process from strategy to projects (Bridges, 1999;
Dinsmore, 2006; Meskendahl, 2010; Turner,
1999). Others indicate a two-way interaction
whereby organizational and project portfolio
activities are said to facilitate the two-way
interaction (Burgelman, 1991; Milosevic &
Srivannaboon, 2006). Having a macroview of
the organization and its microcomponents or
projects is strategically crucial. For example,
from a macroperspective, a portfolio manager is
able to provide a bird’s-eye view or big-picture
approach to projects and programs in the portfolio
to identify and reduce redundancies while
optimizing valuable synergies. When asked how
value is enhanced in a particular portfolio, the
Portfolio Director (PoD) of FINANCE explained
that portfolio value delivery was often evaluated
by how much money was saved by eliminating
duplicates and integrating synergies. The PoD
explains: “Because I am at a portfolio level,
I can see when two projects or programs have
got a lot of overlap. We would discuss, ‘Can you
combine some of the work, leverage on what that
one is doing? Can you at least design it once, and
both work to the same design?’” Centralizing and
combining several projects that have similar
requirements and deliverables can generate syner-
gies that translate to financial savings for the
portfolio.
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Multilevel Value Creation in PPPM 301
Engage with stakeholders to manage and
optimize multilevel dependencies
In order to manage various types of project or
program value dependencies, Head of Programs
(HoP2) suggests that dialogue and engagement
with other related project management teams is
crucial in order for each party to understand the
interdependencies. “You’re engaging and monitor-
ing with the people upon whom you’re dependent or
who are dependent on you.” A Unit Executive (E5)
of ASSET shares similar perspectives about why it
is important to engage with other project groups:
“You’re working on one project and you have to
keep hold of what other projects are doing, and
that’s very difficult and understanding what the
pieces are that are going to influence yours. Then
they find issues with their piece, so they change. It’s
about having briefings . . . we had briefings for most
projects in keeping engaged, informing them of
what’s happened in our part.” In these cases, man-
agers highlight the importance of communication
across the organizational levels from the top down
and the bottom up as a way to manage and optimize
multilevel value dependencies.
The challenges at the various levels are exacer-
bated by the instances when priorities and
outcomes for the business and program are unclear
or misaligned, as commented by HoP2-FINANCE:
“If we need to make decisions about priorities, it
isn’t always clear what the highest priority is or
what the end net results of the business will be as
opposed to the net result for the program, its scope,
its business case.” As such, priorities and the
achievement of expected results require value to
be clearly articulated and tracked more frequently
in a disciplined fashion as demonstrated in the next
section.
Clarity and accuracy of priorities
and promised value deliverables
Issues may arise when projects and programs feed
projected financial requirements and value contri-
butions upwards to the portfolio that may not be
accurate. At FINANCE, programs report or negoti-
ate business cases by estimating value deliverables
from the bottom up, while the portfolio (top down)
 302 Karyne Ang and Christopher Biesenthal
functioned to review if the estimates and assump-
tions are justified. A problem that the higher levels
sometimes face is where the projected value con-
tributions communicated through the business cases
to garner support may not be accurate, as expressed
by HoP2: “The guys on the project always talk up
the benefits around what they do.” In overcoming
this issue, FINANCE suggests reviewing and track-
ing the assumptions behind the numbers and metrics
to evaluate how the figures were derived.
This problem was also observed at the portfolio
levels:
The problem we’ve got is in the program business
case. The estimates are just gut feelings . . . From
a portfolio point of view that gives us a lot of
discomfort because we’d like to know what’s your
estimate based on? We always review it. What tasks
you are doing? What’s your work breakdown? How
many resources, so we can really feel comfortable
if I give you 10, 20 or 30 million and I know exactly
what you’ll do. The team of portfolio managers can
meet with you every month and cross-check (PoD-
FINANCE).
Time horizons: Priorities and tracking
value in the short- and long-term
In order to drive value throughout the programs and
portfolios, FINANCE suggests that more frequent,
disciplined approaches in identifying and tracking
value is required. “We’re focusing more time on
understanding what value looks like, not in twelve
months’ time, but in three, six, nine, twelve months
and having disciplines upfront in your program, to
forecast, provide an actual and then understanding
the difference between the two” (HoP1).
The emphasis on interdependencies and long-
term planning is critical in ASSET as the public
assets could require operations and maintenance
for up to forty years or more. Thus the considera-
tions of value for ASSET require attention in the
early stages of life cycle management and include
a long-term focus of the dependencies. “What you
do [projects] in that first six months [concept/
design] influences the operations, so we focus on
the design stage because that’s where you get the
best value for money and that’s where we have
influence” (SE6-ENGINE). This comment was
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supported by ASSET-MAINTENANCE, the exter-
nal stakeholder who looked after the maintenance
and operations of one of the asset groups. Poorly
conceptualized and designed assets in the early
stages can impact greatly on the latter stages of
operations and maintenance as described by the
Technical Supervisor (TS): “If the design is not
suited to the environment or the maintenance-
operator, we will suffer and we have already
seen that in many situations here. That a certain
thing was designed but the designer had something
else in his mind and now we are replacing some-
thing every six months just to keep it going.”
This continuous replacement is detrimental to
any organization’s value realization, as it
inefficient and resource intensive, and shows the
importance of involving relevant stakeholders
(i.e., end users) early in the project. End users
(for instance, maintenance and operations person-
nel) need to be consulted and involved in the
design process at the early stages, otherwise this
may prove costly to the organization in the longer
term, as emphasized by TS: “So we are the
end user, if we are not involved in the design
process it is going to be hard, because you will
end up spending a lot more, so the whole lifecycle
cost will go up unless you close the loop at the
design level.”
However, in managing multiple stakeholders and
projects in a life cycle portfolio like ASSET’s,
the implementation of top-down directives from
stakeholders can be very challenging, as witnessed
in ASSET’s different stakeholder requirements of
timeline and scope. External stakeholders, espe-
cially suppliers in project delivery teams, struggle
with adhering to high-level stakeholder require-
ments due to the different requirements and value
deliverables expected from contractual agreements
and delivery time frames that different stakeholders
operate on, as explained by TS-MAINTENANCE:
“The Whole-of-life is a very different concept to
what we are doing. If we have a seven-year time
frame, how do we budget for longer term actions?
If I do something now that will save money but the
payback is 10 years, my management won’t be too
keen.” From this example, internal and external
stakeholder expectations of short- versus longer-
term value returns from project deliverables ought

to be reviewed, clarified, and negotiated early to
account for the different time frames and conditions
that different stakeholders are working within.
Power, politics, and relationships: Relational
factors contributing to dependencies, value
creation and delivery
Dependencies at the various organizational levels
need to consider the relational aspects of various
stakeholders. As previously discussed, in order to
gain clarity around the issues or expected value,
managers need to make sense of the stakeholders’
priorities and issues. A large part of making sense of
stakeholder needs is in communicating and enga-
ging with them, as demonstrated through these com-
ments: “You want to uncover what’s working and
what’s not working. You talk to all the key stake-
holders. You understand where they are all coming
from. What the most important issues are . . . You
meet the people, you understand the priorities, a lot
of it is in working with people. How you work with
people. You work one-on-one” (ELC-FINANCE).
To a certain extent, Project Director (PrD)-
MAINTENANCE stresses the importance of com-
municating and connecting with key stakeholders
from the onset: “I want to go and meet all the key
stakeholders, I want to very quickly know who is
important in this project, I want to meet them face-
to-face, I want to get a sense of what’s this person
like. You talk to the sponsor, that is the first place
that I start.”
Where dependencies are identified, it is important
to identify the relationships in the flow. Building
elements of trust and respect in a stakeholder rela-
tionship is key, particularly for managers attempting
to deliver multiple programs owned by different sta-
keholders, as shared by HoP1-FINANCE: “I had
a colleague running that program. Understanding
those dependencies and building a relationship with
the areas where you had the dependency rather than
just hoping it will be solved. Now, this is a people
game. This means you need to engage with the people
who are actually going to make the impact, the out-
come that you’re striving for. You’ve got to build
those trusted relationships and one of respect.”
The complexities arise when stakeholders exert
their power and influence on projects that may be
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Multilevel Value Creation in PPPM 303
deemed ineligible in a portfolio, but may have an
impact on the portfolio from a relational perspec-
tive. PoD-FINANCE illustrated the point:
and he needed about 2 million to do a small
change but really was not eligible. I had to say
no to him. He was very unhappy. He made a lot of
phone calls. We ended up funding his change, but
logically and clearly, we shouldn’t have done it,
but I also realized because he is quite politically
placed, and he is a very powerful player. If I don’t
help him in the longer term it will be bad for me.
I am still a bit sore because I feel I was pushed,
almost bullied into it.
Having stronger organizational governance
policies and protocols around decisions and account-
abilities could help in reducing such incidences from
happening in organizations, while protecting those in
the position of executing stakeholder requirements.
Power and relationship interdependencies are
further highlighted as the norm to influencing and
achieving outcomes in large, complex organizations
like FINANCE: “People want to get their way
because of what it means for them personally and
professionally. It’s all about influence and recogni-
tion. The people who get to these high levels, effec-
tively more so” (HoP1). This point is supported by
ELC about understanding and attending to power
bases: “Politics is all wrapped around the power.
People getting what they want . . . it’s to do with
someone’s objectives, or what they want to achieve.
You have to understand whose power matters, typi-
cally, it’s on the basis of track record, have they
always got their own way . . . once they are deter-
mined to get an outcome, they get it. You pay a lot of
attention to them.”
“It’s a political game . . . Ours is about winning
over influence, getting support from your peers and
being placed in a position where you can make
decisions. Then, the money will flow” (HoP1).
In the two scenarios, stakeholders are observed
to seek out and align themselves to the perceivably
effective, important and influential ”power bases”
in order to ensure their own success in the organi-
zation. However, stakeholder saliency, roles and
expectations, attention, and interests can differ at
various points of the project, program, or portfo-
lio. As such, value management within OPM
 304 Karyne Ang and Christopher Biesenthal
becomes an iterative process that includes
a sensemaking process, in which the final values
for different stakeholders evolve during the course
of the project, program, and portfolio.
Sensemaking with different stakeholders at
the different stages and levels
Organizational sensemaking is an important factor
in the process of managing multilevel value in OPM
and helps us to understand and investigate how
value can be produced and managed across different
stakeholder levels. Weick (Weick, 1995, 2001;
Weick et al., 2005) talks about organizations as
“sensemaking systems.” Sensemaking in organiza-
tions is a complex process of forming and re-
forming shared understandings from the ongoing
interactions and coordinated actions between peo-
ple (Easterby-Smith, Crossan, & Nicolini, 2000;
Weick, Sutcliffe, & Obstfeld, 2005). In the context
of value, people share feelings, intent, and percep-
tions of value among themselves and gradually
define and create meanings about value. These
shared sentiments enable people to make decisions
and take actions in their projects, which helps them
to achieve the strategic goals of the portfolio and
organization. This interaction is an iterative, trial-
and-error, sensemaking process built through dis-
cussion and conversation, and subsequent actions.
In a way, making sense of value occurs both in
process and in actuality. For instance, value deliv-
ery and realization in actuality might differ from
how it ought to happen (creation and proposition) as
it is influenced by multiple actors among other
organizational factors.
Through sensemaking perspectives, managers
attempt to build clarity around what constitutes
value in a portfolio of projects in order to prior-
itize their decisions, and this in turn will help them
define, negotiate, and integrate value dimensions
with multiple stakeholders that can help determine
future decisions and actions. However, decisions
made are often determined by people’s preconcep-
tions of their surroundings (Weick, 1995, 2001).
This could lead to portfolio managers focusing on
the dominant views of value in decision-making
including financial value or shorter-term gains,
thus dismissing or neglecting other important
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factors in the decision process such as the consid-
eration of long-term value generated from the
project and program outcomes. These longer-
term value contributions to the portfolio are often
intangible, and the neglect could exacerbate pre-
existing blind spots within the teams or portfolio
and may lead to project breakdowns and portfolio
disasters. This point creates a tension and gulf
between what Weick (1995, 2001) states about
sensemaking practices as a subjective and inter-
pretive practice as opposed to traditional project
portfolio processes and decision support tools that
offer as “best practices” in determining what is of
value in a portfolio. This amplifies the challenge
and complexities of understanding value creation
interdependencies when there are multiple stake-
holders at multiple levels in organizational project
management.
We instrumentally link sensemaking practices
with exploring how managers at various levels
interpret and integrate stakeholder value dimen-
sions from the micro- to the macrolevels to achieve
the strategic intents of the organization.
Our version of sensemaking fosters the incor-
poration of multiple stakeholder expectations
when creating value and accepts the evolutionary
character of organizational value. Value can and
often does change constantly or is characterized,
shaped, and verified within the stream of lived
experiences that occur throughout the project
(Cicmil, Williams, Thomas, & Hodgson, 2006).
Organizational value is therefore fundamentally
contextual (Schiller, 1966). We believe sensemak-
ing is a vital aspect to acknowledge, align, and
combine viewpoints and activities to create organi-
zational value that represents the best result for all
stakeholders involved.
The case studies illustrate several examples of
sensemaking through the facilitation of shared
understandings and establishing common lan-
guage across the organizational projects. “It’s not
always clear what the right direction is, so it is
a case of getting people together and having
discussions and going through what makes sense,
where is there a common agreement and working
from the common agreement and enlarging it
until we figure out what we need” (PrD-
MAINTENANCE).

PrD uses a collaborative approach in making
decisions about the projects. Others describe their
process as:
Stakeholder consultation, all the way through, and
again in different ways . . . Actually getting people
together to have those discussions, and seek out
what it is the stakeholders want . . . It is talking to
the right people, and understanding what their role
is, and the limits of their role . . . A lot of it concerns
talking, and really, where projects are working well
is where people are getting in a room together and
really understanding what everyone’s role in this is
(SE6-ENGINE).
PrD-MAINTENANCE emphasizes the impor-
tance of stakeholder involvement, alignment, and
the understanding of their role in the project.
Additionally, due to the often divergent views
about projects, it was important to ensure that sta-
keholders had a common understanding of the pro-
ject arrangements and ensure that they were aligned
since most stakeholders in the projects came from
diverse parts of the business and had different inter-
ests in the project. At FINANCE, the IT governance
group works across a number of business units to
collaborate with senior representatives from each
business unit. This ensures that when the group is
discussing major IT architectural requirements, and
priorities, each business unit has a voice.
Sensemaking mechanisms allow managers to
combine multiple, different agendas, objectives
and practices with practical excellence to success-
fully cocreate the best value for all stakeholders
involved. However, the cases demonstrate that suc-
cessful value creation for all stakeholders in
a multilevel OPM setting require solid, active, and
timely communication and engagement across all
organizational levels.
Importance of communications and
information sharing in a multilevel context
Project and portfolio managers need to actively com-
municate and share information in order to keep track
of projects in an evolving strategic environment
(Aritua, Smith, & Bower, 2009). Besides interproject
communications (Nobeoka & Cusumano, 1995;
Platje, Seidel, & Wadman, 1994), organizations
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Multilevel Value Creation in PPPM 305
need to be able to capture and share information
(Kim & Wilemon, 2007) and view that information
from a portfolio perspective (Cooper, Edgett, &
Kleinschmidt, 2001; Durant-Law, 2012; Levine,
2007) in order to support decision making.
Additionally, information needs to flow from the
bottom up, as well as across units. One such example
emphasizes the importance of ensuring that other
facets of the organization stay connected and
informed about the projects or programs so that the
value can be understood and further communicated
to others: “One of the big things about benefits that
we’re driving both through our portfolio now and
what we did back then is ensuring the banker and
customer awareness around what we’re doing so
they can talk to customers about the value” (HoP1-
FINANCE).
In another example, information can be used
influentially from the micro level up to macro- or
mesolevel when harnessed well. “Then once you’ve
actually, got that information, you then go leave it to
your board to make the decision. Obviously, you
influence on the way up . . . the way influence goes, it
goes from low to high as opposed to high to low.
It can go both ways, but often in decisions of this
magnitude . . . require a lot of influencing, under-
standing and trying to ensure that you go to the right
people for the right advice” (HoP1-FINANCE).
This example indicates the importance and power
of reciprocal communication in multilevel organi-
zations. This two-way interaction fosters collabora-
tion and thus value creation across different levels,
as all stakeholders are provided with the opportu-
nity to voice their opinion and share relevant
information.
Meanwhile, managers need to be very clear about
the purpose and problems to solve in order to deliver
value, as explained by HoP1: “I’ve got a big belief
that any project has got to be about understanding
a problem. Once you can articulate the process in
which we solve that, then it’s around the execution,
and then, achieve the outcome . . . The best projects
that deliver the best outcomes is where you have
a very specific purpose and why you established it,
and the value which you’re creating as a result of
building that asset is very clear and actually is
measurable.”
 306 Karyne Ang and Christopher Biesenthal
However, how the information is shared for
effective decision making is also of importance in
a multilevel setting. Projects and programs are
dependent on effective and efficient decision mak-
ing. ASSET and FINANCE have different
approaches to project and program information
and knowledge sharing. Much of portfolio decision
making is around prioritization, and FINANCE
needed a more efficient way to make decisions
involving multiple stakeholders, as expressed by
ELC: “Only because a lot of decisions with portfo-
lios is to do with prioritization. It’s one thing over
another. Sitting around a table and arguing over
a bit of paper, it’s not effective.” FINANCE
reduced the number of meetings with various stake-
holders through its adoption of the Agile philoso-
phy, “A lot of the decision-making that we do, now,
happens in real time. We’ve actually found a much
better communication and information sharing
using visualization techniques in real time. Instead
of sitting in front of a table, they stand in front of
a wall where they can actually see where the issues
are, see the impacts. They can see the decisions
which have been made . . . You have very lively
discussions in front of the wall, at the end of
the day, you make a decision and you move on”
(ELC).
Thus, the examples show that projects, programs
and portfolios are dependent on the effective and
efficient flow of information to engage, influence
and support the decisions and value judgments of
different stakeholders.
Engagement through driving project value
rather than project deliverables
Ultimately, project teams at the micro levels need to
be more actively engaged with driving value and not
just project deliverables, as commented by HoP1-
FINANCE: “Once upon a time, as a project man-
ager, we were seen as building an asset, handing it
over to the businesses, and then letting the sponsors
drive the value. Whereas now we’re saying, ‘you’re
with the project team together with the change
management capability. You need to be much
more commercially orientated around driving
value. You are also responsible for driving the
benefit to the shareholders on what you built.’”
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In contrast, MAINTENANCE views that value is
determined by the sponsor because value might
only be realized several years after a project has
been completed. The sponsor is viewed as the key
stakeholder in recognizing post-project value, as
commented by PrD: “That’s usually beyond the
life of the project, so which is why the sponsor is
really key to the whole thing. They can see the whole
thing. At the end of the day the sponsor has to decide
whether value was added, was it worth the expense.
Within the project it’s sometimes not visible, but
within the business that sponsors the project, you
would hope that they have ways of measuring it over
time.” The two cases demonstrate that while project
teams need to engage with driving value for stake-
holders, some types of value returns might only
emerge after a long time, beyond the life of the
project.
Conclusions: Sensemaking as a way
to engage, drive, and integrate multilevel
organization value creation
The chapter provides an organization-level per-
spective of value creation by considering the inter-
dependencies at the multiple levels of projects,
programs and portfolios. We drew upon two
diverse case studies in Australia to demonstrate
an OPM perspective of value dependencies in the
different levels of an organization. Whether in
private (for-profit) or public (government) envir-
onments, value dependencies in organizations play
an important role, but one that has not previously
been studied comprehensively from an OPM
perspective.
The findings provide examples of mechanisms
that organizations use to manage multilevel value
dependencies across projects, programs and portfo-
lios. One of the key capabilities that occur within
the outlined mechanisms is stakeholder communi-
cation and engagement across the organizational
levels from the top down and the bottom up. This
can be challenging, especially in a multilevel orga-
nizational environment, as it requires a good under-
standing of the expectations, relationships, agendas
and objectives residing on each of the levels, as
well as the interdependencies between those

organizational levels. One needs to be cognizant of
the relational aspects of dealing and engaging with
stakeholders. Power, politics and stakeholder
relationships can influence and impact on multilevel
dependencies, value creation and delivery.
Stakeholder and organizational project priorities
and the achievement of expected results require
value to be clearly articulated and tracked more
frequently in a disciplined fashion. To do so, one
needs to be aware of and understand the relation-
ships between strategy, projects, and portfolio
management to fully grasp the magnitudes of
work, the flows of information and the dependent
nature between projects, programs and portfolios.
A vital component to manage value interdepen-
dencies and to cocreate value for all stakeholders
involved is the ability to combine multiple, different
agendas, objectives, and practices. This ability
reflects organizational sensemaking, which is criti-
cal when dealing with complex multilevel organiza-
tional project management, particularly when there
are multiple stakeholders at the various stages and
levels of the organization, from the project, program
and portfolio levels, in addition to other organiza-
tional activities. Sensemaking is therefore an impor-
tant area that needs to be further explored in the
context of OPM.
To conclude, the cases demonstrate that success-
ful value creation for all stakeholders in a multilevel
OPM setting requires solid, active, and timely
communication and engagement across all organi-
zational levels. For these reasons, a project team’s
ability to be flexible and agile, while considering
the longer-term contributions and their engagement
with driving project value, rather than just project
deliverables, might be better appreciated by higher
management. Success – in terms of value creation –
in projects, programs, portfolios or the organization
is based on a combination of efforts that involves
a multilevel perspective on organizational mechan-
isms, communication and stakeholder engagement.
When considering the combinations of efforts
involved in optimizing value for OPM, sensemak-
ing becomes a vital capability that helps to integrate
the dependencies and relationships from the micro
to the macro levels, as value can then be viewed,
identified, negotiated, articulated, and integrated
more holistically in an organization.
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Multilevel Value Creation in PPPM 307
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 CHAPTER
21
An Inherent Complexity
Projects and Organizations
KAYE REMINGTON
Introduction
Inherent theoretical and practical inconsistencies
challenge our understanding of how projects func-
tion within organizations, particularly when orga-
nizations and projects are analyzed with a lens
informed by complexity theory. Strategy, deliv-
ered via portfolios, programs, and projects, is
accompanied by a seductive illusion of control,
the underpinning belief that the future is predict-
able. How do projects, which by definition are
discreet units of delivery, with predetermined
objectives, budgets, scope, and schedules, operate
in an organizational world that is dynamic
and emergent? These inconsistencies present
a challenge for OPM.
This chapter explores some of the dissonances
that occur when projects are sponsored and deliv-
ered within dynamic organizations, which might
be operating close to the “edge of chaos.” Finally,
two case studies illustrate how complex project
challenges were resolved in practice and how the
process of resolution resulted in unexpected and far-
reaching positive impacts for the host organizations
and beyond. Both case studies have been the subject
of action research by the author. Both projects are
from the government sphere, where extremely high
levels of project and organizational complexity can
be observed.
Complexity Thinking and Organization
Theory
With some exceptions (see, for example, Stacey,
2007, 2012; Uhl-Bien & Marion, 2008) the applica-
tion of complexity thinking to organizational theory
has been colored by rational constructivist thinking;
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in particular, the belief that organizational strategy
is fully able to be determined by leaders who
have complete knowledge of the system, and that
strategy can be delivered using essentially directive
approaches (Burnes, 2004; Taylor & Hirst, 2001).
Perhaps, in order to make the concepts of organiza-
tional complexity more palatable to executive leaders
operating under the paradigm of central control,
descriptions of nonlinearity, self-organization, and
emergence are often accompanied by advice on
how to keep or regain control.
Stacey (2012, 2007) argues that this rationalist-
constructivist position compromises attempts to
explore and explain the effects of nonlinearity and
emergence in organizations. Stacey’s earlier
attempts to understand organizational complexity
applied the lenses of cognitive psychology and
psychoanalysis (Stacey, 2012, p. 154). Cognitive
psychology is centered on the individual and, from
this philosophical position, the manager is viewed
as an independent, objective observer and actor.
The idea of the manager as a potent and objective
player in the system is also implicit in theories of
cybernetics (Ashby, 1945, 1956; Beer, 1966) and
systems dynamics (Forrester, 1961). However, it is
the assumption of the “autonomous individual,”
who can objectively observe the system and inter-
vene appropriately in a dynamic, emergent system,
that raises concern with authors like Stacey (2007,
2012) and Marion (1999). In challenging his own
methodological position, Stacey has drawn upon
the work of the German-British sociologist
Norbert Elias (1991, 2000). Elias argues against
the commonly held concept of systems and bound-
aries defining systems. In so doing, he contests
the predominantly spatial quality of a system as
a “whole,” because it implies the possibility of
completion. Instead, he argues that societies are
311
 312 Kaye Remington
always in a state of continuous flow; that society
was never planned. Rather, society, as we know it, is
the result of the interaction of intentions and actions
of many interdependent people and groups over
time. For Elias (1991), if individuals or groups do
attempt to plan events rationally, the stimuli for
planning behavior are the changes in society, not
the other way round. Societal changes, occurring as
a result of myriad events, some random, some pur-
poseful, provide the impetus for individuals and
groups to act, and this has implications for organi-
zations, which are collections of individuals, linked
with histories.
From his research, Elias concludes that although
change in societies over time was unplanned, some
kind of order does emerge, which is both orderly
and directional (Elias, 1991, pp. 146–147); that
there was never a grand plan. He demonstrates that
as societies developed, constraints advocated or
imposed by some people or groups became inter-
nalized as self-restraints by others and hence
became the norms by which the society governed
itself (Elias, 2000, pp. 365–366). There is no evi-
dence in his writing that Elias was aware of com-
plexity science; however, his research observations
have their parallel in the ideas of self-organization
and emergence that are central to complexity
science. Many individuals interact with plans and
intentions but the large-scale consequences of the
interaction of those plans emerge from nonlinear
interactions and cannot be truly predicted by any
one of those individuals or groups who believed
they were planning the future.
Integrating Elias’ research, Stacey and his collea-
gues propose “a relationship psychology complex-
ity perspective on organisations” that “would put
the self-organizing conversational life of an organi-
zation at the center of the process through which
strategies emerge” (2012, p. 155). They name this
“complex responsive processes” in order to avoid
the association with the term “complex adaptive
system,” which has been compromised through an
association with the idea of the autonomous, objec-
tive individual manager (ibid.). Elias’ work on the
evolution of human societies has helped to bridge an
uncomfortable gap that occurs when research and
modeling from the natural sciences is applied to
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organizations. Stacey and his colleagues have
attempted to address the paradoxical idea of the
objective manager who can fully direct outcomes
while working within a complex system, the
organization.
OPM and Organizational Complexity
Modeling organizations in terms of complex
adaptive systems reveals emergent entities,
interacting dynamically with their environments.
Leaders in these dynamic organizations attempt to
realize change and address external challenges to
the system via portfolios, programs, and projects.
Although portfolio and program management
can offer various degrees of flexibility in response
to dynamic contexts, the dominant paradigm
underpinning this approach is control. Several
project management authors have also observed
nonlinear behavior in projects (see, for example,
Clift & Vandenbosch, 1999; Girmscheid &
Brockman, 2008; Muller & Geraldi, 2007;
Pryke & Smyth, 2006; Remington & Pollack,
2007; Soderlund, 2002; Williams, 1999, 2002).
The idea of applying control-based approaches
within a dynamic, emergent environment involves
two competing paradigms. These competing
paradigms operate simultaneously in practice but
without serious interrogation. OPM research can
foster a deeper understanding of the tensions and
inconsistencies that result. The effects of some of
these dissonances are explored in the following
sections of this chapter, such as: differences in
intention; systemic ignorance; accountability;
standard rules and processes; and how projects
function as attractors.
Differences in Intention
There exists a difference of intention in relation to
how and why complexity theory is applied to orga-
nizations and projects. For example, organizational
theorists and project management theorists put quite
a different spin on the phenomenon of emergence.
Emergence, referring to new properties that were

not present in, or predictable from, the initial con-
ditions (Holland, 1998; Stace & Goldstein, 2006)
can result in exciting new possibilities or cata-
strophic collapses. Organizational theorists have
explored complexity thinking, mainly with the
intention of assisting leaders to consciously take
advantage of understanding complex behavior to
enable them to grow and develop their organiza-
tions. Some (Brown & Eisenhardt; Nonaka &
Tachuchi, 1995) have emphasized how opportu-
nities for learning and creativity are enhanced
when leaders are able to manage at least some of
their operations “at the edge of chaos.” While learn-
ing almost certainly accelerates during rapid
emergence, for projects, rapid emergence is seen
as something that has the propensity to dramatically
alter the course of the project from its predeter-
mined objectives. Therefore, research in the field
of project management has focused on how to control
or steer the project to reduce the risk of diversion
from predetermined objectives. Emergence, particu-
larly emergent risk patterns, has been studied by
project management researchers, for postproject
litigation (Ackerman, Eden & Williams, 1997), and
this research is used to prepare teams to manage
complex event patterns, and to help project teams to
mitigate potential risks.
For both organizational theory and project man-
agement theory. the belief system underpinning this
research is rational constructivism. At one level the
outcomes work in parallel. Each theoretical position
applies complexity thinking with the aim of sup-
porting organizational growth and development.
Although the global intention is aligned, there is
an uncomfortable mismatch in practice. With nota-
ble exceptions, both positions are underpinned
by a belief in directive leadership, which can
effectively and accurately set goals. However, as
this belief is contrary to what is known about
the behavior of complex systems, there exists
a theoretical dichotomy that provides a shaky foun-
dation for practice.
Problem of Systemic Ignorance
From the perspective of complexity science, it must
be acknowledged that there is “whole of system
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An Inherent Complexity 313
ignorance” (Bernstein, 2009, p. 17). This effect
increases with scale. Thus the cult of the leader,
the idea of a single omniscient leader, or even
a single, all-knowing, leadership group has been
challenged (Taylor, 2005). It is theoretically and
practically impossible for mangers and leaders, no
matter how senior their position, to have cogni-
zance of all the information that is relevant to any
situation, at any moment in time. At best, a senior
leader can have a good partial understanding of
critical information and immediate access to
others who are willing and able to provide other
perspectives. This systemic ignorance is com-
pounded by the reality that most leaders operate
in a world in which information is distributed and
traded for power and influence (Introna, 1997).
Decision-making behavior during periods of
uncertainty is also an exacerbating factor.
Evidence suggests that executive leaders actually
narrow their focus during times of uncertainty and
crisis (Boyd & Fulk, 1996; Fredrickson & Mitchell,
1984). One of the emotions associated with
uncertainty is stress (Brown, Stacey, &
Nandhakumar, 2007). It is possible that the
tendency to narrow focus stems from the need to
reduce personal anxiety levels, by restricting
attention to areas that are more familiar.
Complexity thinking suggests that crises, as well
as creativity, occur in times of rapid emergence
(Anderson, 1999; Gleick, 1993). Emergence occurs
when a series of unexpected events combine to
interact in a nonlinear way. Reinforcing feedback
loops within the system can quickly amplify effects
to produce consequences that are entirely unex-
pected. A narrowing of focus during times of uncer-
tainty might mean that leaders reduce attention to
information that is categorized as irrelevant to the
issue (Fordor, de Baets, & Perny, 2000). This forces
attention on a narrow portion of what can be
perceived, and therefore the response is likely to
be local rather than global in effect. In projects,
during periods of rapid emergence, local interven-
tions have been shown to have wide-reaching
ramifications (Williams, 2004) that are neither
expected nor desirable.
Portfolio, program, and project management
enables strategy implementation to be broken
down into “manageable” segments. Projects are,
 314 Kaye Remington
ostensibly, small enough to allow local project lea-
ders to grasp most, if not all, of the information that
directly affects each project. For practical reasons,
a project leader’s attention is likely to focus on what
immediately affects the project. Such an approach is
effective while the larger system is relatively stable.
An efficient way of getting the work done, this focus
allows the leader to create an environment that
protects the specialist team workers, so that they
can focus on their part of the project, unhindered
by external pressures. Nevertheless, the project
remains dependent on the larger system for infor-
mation and resources. In a relatively stable environ-
ment, a project leader should be able to develop the
necessary relationships to secure needed resources.
When times are turbulent, the systems external to
the project, such as parts of the organization, behave
erratically. The project is then dependent, for the
information and products it needs, on entities that
may be changing or unstable. Those external enti-
ties can be fully functional at one moment in time,
then entirely dysfunctional, or even extinct, a short
time later. These environments are neither under the
project leader’s control nor within his/her capacity
to influence. Therefore, in a turbulent organizational
environment it is not possible for a project leader
and his/her team to have full access to the informa-
tion needed to complete the work.
Also contentious within dynamic environments
are the mechanisms by which organizations and
projects capture knowledge for future use. To
some extent the inherent complexity of organiza-
tions allows innovative leaders to take advantage of
emergent event sequences to adapt and learn.
Emergent behavior could invite leadership teams
to adapt their products or capture new ideas in
response to external demands, or to develop new
markets. Challenges associated with capture and
use of learning in stable project environments have
been well documented (Disterer, 2002; Schindler &
Eppler, 2003). While learning through innovation
does occur within the project context, learning is
often an unexpected and uncontrolled by-product of
process. Capture or transference to the next project
is problematic at the best of times, relying on sound,
stable organizational support. Periods of organiza-
tional turbulence must surely have an impact on this
already precarious learning process. Therefore,
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unless teams are maintained or stable, and reliable
organizational support is in place, for example
through a well-established PMO, new programs
and projects have the propensity to start up,
completely ignorant of lessons learned by other
project teams.
The Problem of Accountability
Associated with nonlinearity and diffuse leader-
ship is the loss of direct lines of accountability.
It is difficult to pin down accountability for actions
that have untraceable causal pathways (Kiel, 1994;
Radin, 2006). Most business units and nearly all
programs and projects managed within organiza-
tions depend on (1) resources that are controlled by
other units within the organization, or (2) external
groups that are contracted to the organization. In an
organization experiencing change, the resultant
diffusion of access and accountability affects
even the smallest project. For programs and pro-
jects with long durations the accountability path-
ways can become diffuse.
The issue of accountability is also related to how
projects are resourced. As we know, large programs
and projects consume vast amounts of money and
resources. At the same time, they can drain or
deplete existing functions within the organization.
Successful adaptation to complex environments
requires planned redundancy (Churchland, 2002;
Clark & Eliasmith, 2002). Nevertheless, building
redundancy into large programs and projects is
philosophically opposed to the raison d’etre that
drives leaders to demand organizational efficiency.
Benefit-cost analyses often indicate that the cost of
the program or project is quite small compared with
the savings or income generated for the organiza-
tion. However, many large projects are underre-
sourced from the beginning (Papadopoulous &
Merali, 2008. This occurs even when anticipated
levels of complexity would strongly support mana-
ged redundancy, particularly in resourcing and
scheduling (Peterson, Silsbee, & Schmoldt, 1994).
The carrot of the anticipated benefits compared with
the actual cost of the project often encourages
sloppy underplanning, in the knowledge that
additional resources can be sought during the

project’s life cycle. This can result in apparent cost
and/or schedule blowout later in the project life
cycle. Accountability for project overruns rests
firmly with the project leaders rather than with
project sponsors or whoever constructed the busi-
ness case.
The intricately networked nature of organiza-
tions means that accountability in the larger system
is impossible to trace. Therefore, programs and
projects may be established purposefully, or used
opportunistically, as scapegoats. It has been well
documented that projects have been made accoun-
table for broader systemic failure (Halligan, 2007;
Lloyd, 2008). Consider the Global Financial Crisis
of 2008. How many corporate heads have actually
been prosecuted for crimes involving misappro-
priation of billions of dollars, extracted under
false pretenses from society’s most economically
vulnerable people? However, project teams and
their leaders are nearly always identifiable and
can become clear targets of blame for corporate
failure. As research has revealed, program and
project failure is most likely to be due to
a combination of poorly exercised sponsorship
(Crawford, Cooke-Davies, Hobbs, et al., 2008)
nesting governance (Hobbs & Miller, 2002), inade-
quate definition and feasibility analysis, and lack
of understanding of the effects of emergence
by executive leaders (Flyvbjerg, Bruzelius, &
Rothengatter, 2003). Project teams and their lea-
ders become accountable simply because they can
be traced.
Management Practice in a Mechanistic
Paradigm
Emergence, adaptation and evolution allow
a complex system to self-organize and acquire
a new order. Global structures or patterns appear
as a result of interactions from all levels of the
system (Bonabeau et al., 1999). This new order is
temporary and is itself in the process of evolution.
Self-organization then becomes a mechanism for
evolution of the organization (Johnson & Lam,
2010; Kauffman, 1995). Evolution, in this sense, is
critical to an organization’s survival. However, the
complexity sciences have demonstrated that the
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An Inherent Complexity 315
rules of engagement between the interacting units
derive from local information, not from overall
rules or patterns, as a mechanistic paradigm
would suggest (Holland & Melhuish, 1999).
The arguments for emergence, self-organization
and evolution are even more compelling when the
system, or organization, under investigation
increases in size. This picture fits neatly with
Elias’s observations of evolution in society.
A management tool used widely by organiza-
tional strategists and an idea that underpins
most project management theory, including scope
management, time management, budgeting and
cost control, is decomposition. The aim is to
enhance understanding of the whole system
through breaking down and analyzing the compo-
nent parts of that system. However, many ques-
tions about decomposition arise (Ho, 2001).
There is the question of whether, once having
been dissected into smaller parts, which are then
operated on separately, can something be recon-
structed in any meaningful way? It is possible that
recomposition for delivery is itself an adaptive
process and therefore might adapt in line with the
way the organization is emerging. However, it is
also possible that recomposition for delivery might
result in deliverables that are no longer relevant to
the organizational context.
Another application of the idea of decomposi-
tion is the pilot project. Based on the belief that if
something works at a local level it can be extra-
polated to work at a global level, pilot projects are
initiated to test potential responses to intended
global project deliverables. The attraction is
unification of processes that gives the illusion of
simplicity and therefore control. Once delivered
successfully, pilot projects are frequently
expanded into huge global programs, which them-
selves assume all the characteristics of a complex
system. A pilot project for change, if successful at
a local level and then extrapolated to the whole
organization, is then in danger of producing
a response to perceived organizational needs that
are actually local and specific.
Decomposition as an idea comes with another
underpinning assumption. It assumes that the
manager has complete knowledge of the situation
at the time of planning. Decomposition requires
 316 Kaye Remington
categorization, and the process of categorization
involves decisions about what to include or what
not to include, which categories to select and which
to ignore, and how to arrange the hierarchy of cate-
gories (Harvey et al., 2001). However, managers
habitually construct categories dictated by their
experience, their particular area of expertise, and
bounded by departmental controls. The hierarchies
and boundaries are usually imperfect. If, as com-
plexity theorists suggest, no manager is able to have
whole-of-system knowledge, it follows that design
of fully comprehensive categories is impossible.
The challenge increases when the organizational
landscape is dynamic. In a complex system, new
and surprising behaviors are likely to involve inter-
action between cross-category entities. Interaction
between categorized entities and entities that
escaped inclusion in the original decomposition is
also likely. The process of decomposition implies
exclusion. Research suggests that excluded condi-
tions or factors, either unidentified or ranked of little
importance and then ignored, can be implicated in
emergent risk patterns (Maytorena & Winch, 2010).
Other research (Williams, 2004) also suggests
that rapidly accelerating risk events, involving
reinforcing feedback loops can be triggered by
contemporaneous triggering of small elements
whose potential relationships have been hitherto
overlooked.
Nevertheless, decomposition is a useful techni-
que that allows managers to break down large
chunks of information into “manageable” bits. As
a technique it derives directly from a mechanistic
paradigm. Therefore, in a dynamic context, the
decomposition process might expose the organiza-
tion to unpredictable emergent risk patterns because
it fails to take notice of elements outside predeter-
mined categories. In addition, illusions of thorough-
ness and safety that accompany the use of this
technique can reduce the need to continue to scan
for other potentially undefined categories or rogue
interactions.
Rules and Processes
Successful leaders and managers of complex
programs and projects are politically very astute
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(DuBin, 2009; Kurchner-Hawkins & Miller,
2006). They are able to manage complex relation-
ships, they know how to work innovatively to
address challenges, and intrinsically they under-
stand when to follow and when to break rules.
These skills take years to acquire and not every
manager will be able to acquire proficiency at this
level (Vigoda-Gadot & Drory, 2006). Thus, there is
a practical need be able to break down portfolios
and programs into projects that are small enough
and short enough to be managed by inexperienced
managers who are able to follow rules. Project
management theory and practice has evolved with
strong allegiance to such a mechanistic paradigm.
Practice has relied on being able to define project
goals and objectives through successive processes
of definition.
Provided project knowledge can be captured
efficiently, best practice rules and processes are
based on precedence. Situations of rapid emer-
gence are characterized by novelty. An emergent
situation might be unlike anything else that has
gone before. There are no real precedents.
However, we encourage project teams to apply
standardized processes to novel situations.
As some authors have pointed out (Snowdon,
2002) applying best practice, based on precedent,
to novel complex situations, can cause the project
to become critically unmanageable, an effect that
multiplies with the size of the project. Therefore,
individual projects that are very small in scale,
with relatively short durations and low levels
of organizational impact, lend themselves to
planning and delivery using such a mechanistic
paradigm because they can be shut down easily
as the host organization evolves. Large-scale
projects are less adaptable and therefore less able
to change direction or be shut down. Therefore,
large-scale projects, especially when conducted in
dynamic environments, might be less suited to
a mechanistic paradigm. Approaches involving
pluralism and multiple paradigms appear to be
more applicable (Pollack, 2013).
Many organizations have introduced organization-
wide project management processes in an attempt
to provide consistency in practice and reporting.
However, during times of uncertainty and rapid
emergence, do people really follow these rules

and processes? Some authors (see, for example,
Styhre et al., 2010) have observed that during
such periods, project practitioners and executive
leaders abandon standard rules and processes and
behave in a seemingly ad hoc manner. During
periods of uncertainty, decisions are more likely to
be made on the basis of emotion, and decisions
previously made based on evidence are often
overturned in an apparently arbitrary manner.
For example, during high levels of uncertainty,
members of executive boards have overturned
earlier, carefully thought out, decisions. Other
researchers have also observed that organizations
operating in uncertain environments use fewer
formal learning procedures than those operating in
certain environments (Ellis & Shpielberg, 2003;
Hovarth et al., 1981).
However, emergent events are nonlinear. They
do not follow “rules.” Emergent events are diffi-
cult to anticipate because they arise from numer-
ous interactions, hitherto considered to be
insignificant. Causal events and consequences
might be noticed or anticipated but many of their
potential relationships will have gone unobserved.
Management by exception has evolved to reserve
involvement of senior executive decision makers
for decisions that are critical and to allocate rea-
sonable responsibility to project leaders. Levels of
delegation are preassigned to program and project
leaders, based on current organizational knowl-
edge, experience, and culture. In a dynamic
environment, project events can emerge and
escalate very rapidly. Therefore, the management
by exception approach, intended to allow time for
executive intervention, may be ineffective. Highly
experienced project managers know when to bend
or break rules but few organizations have
a multitude of project experts at their disposal.
Most organizations are staffed by people with
limited experience but who are able to follow
rules and processes. Rigidly enforced rules and
processes may inhibit appropriate responses to
emergent situations. This poses a challenge for
organizations operating in dynamic environments.
Some organizations now routinely categorize their
projects according to levels of expected complex-
ity. Leaders are assigned to projects based on their
experience with complex projects.
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An Inherent Complexity 317
Projects as Attractors
Because groups within organizations with their own
histories have evolved and are continuing to evolve,
in nonlinear ways, changing aspects of an organiza-
tion’s culture is challenging (Cameron & Quinn,
2005). Group cultures affect the attitudes of a group
to change, either inhibiting or stimulating the group’s
responsiveness to change (Hammer et al., 2012).
Projects within portfolios and programs can theore-
tically be altered, culled, or accelerated in response to
changing organizational directions. However, pro-
jects, even small projects, are not benign entities.
Aside from projects that are initiated with the
intention of changing aspects of the organization,
many projects can stimulate unexpected, widespread
organizational and intraorganizational change.
In complexity jargon, projects become “attractors.”
The effects of an “attractor” can be to stabilize an
environment through application of order or to
destabilize it (Stacey, 2012) or both (Hock, 2005).
The bigger and more complicated the program or
project, the more it comes to resemble a complex
adaptive system, further affecting patterns of rela-
tionships and dependencies (Barabasi et al., 2002).
Therefore, programs and large projects wittingly
or unwittingly facilitate organizational change.
As “attractors,” programs and projects have the
capacity to change the host organization in signifi-
cant ways. Any program or project within the orga-
nization must respond to larger and much more
complex systems that constitute the organization
and its environments. In order to deliver the project
goals that were defined at project initiation, the
project is affected by the larger systems with
which it must interact and on which it depends for
information and resources and in turn the program
or project affects and changes its host organization
and even the organization’s environment. Examples
will be discussed in the following case studies.
Case Study 1: How a Complex Project
Changed Both Its Organization and the
Wider Environment
The Sydney New Year’s Eve Fireworks project
illustrates how an annual event project has provided
 318 Kaye Remington
the stimulus for wide-reaching changes, both to its
sponsoring organization and across local, regional,
and national government. The changes occurred in
response to the complex nature of project and its
impact on many stakeholder groups. This project
was studied using three main approaches: historical
evidence, from internal reports and media articles;
cognitive mapping with the project team, to explore
interconnections and potential emergent risk
scenarios; and interviews.
A Short History
The annual Sydney New Year’s Eve fireworks
display attracts a huge international audience,
because of the spectacular quality of the display
on Sydney Harbor and because the international
time zone convention makes Sydney one of the
first regions in the world to experience the
New Year. As a project (or program), it fits
the definition of a classical project. Being an
event, it has an immovable deadline. It is timed to
the minute with an audience of millions monitoring
the deadline by counting down the minutes until
midnight. It is a highly scrutinized project with
a restricted budget. Scope and quality are also deter-
mined by high public expectation. Sponsored
each year by the Sydney City Council, this program
demonstrates levels of complexity that standard
programs would rarely encounter. The list of stake-
holders alone is daunting. The 2015 annual service
review report lists thirty-two internal stakeholders
and twenty-two external stakeholders (City of
Sydney, 2015). Fifteen of the external stakeholders
listed are categories, each involving multiple
subcategories of stakeholders. For example, the
category labeled “businesses” would comprise all
businesses operating in the area that might be
affected, including those with potential benefit
from the event (shops, restaurants, hotels), build-
ings engaged as bases from where the fireworks are
ignited, businesses that might suffer damage to their
premises if crowds were to get out of hand, and
businesses whose function might be restricted as
a result of the project.
Over the years, the project has become a kind of
“temporary organization” within an organization.
It now has a small permanent team of six and
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planning begins for the next event immediately
after project delivery. Figures for 2015 indicate
that the staff increased to a total workforce of 529
as the deadline approached. Staff comprised:
17.5 percent paid staff (permanent, temporary and
casual); 1.5 percent interns (from tertiary institu-
tions); 48.4 percent volunteers engaged by the
City; and 32.5 percent volunteers engaged through
various community organizations, such as the Girl
Guides. For each Sydney New Year’s Eve event,
approximately 110 parties are engaged under
contract. The annual operational budget for 2015
was just under $A7 million, and, in spite of
increases in full-time staff, efficiencies have
resulted in a decrease in real terms of the operating
budget over the years of operation.
The background of the project is relevant because
it illustrates the evolutionary nature of the develop-
ment of the project. Beginning as a sponsored event
in 1989, the event lost it sponsorship in 1995. Long
lead times are required for large-scale pyrotechnics
displays and much work had been done in prepara-
tion for the 1995 fireworks. A coalition formed by
pyrotechnician Syd Howard and event producer Ric
Birch secured support from the City Council to
continue the event. The police had also raised
concerns that, without a focus for the New Year’s
Eve celebration, antisocial crowd behavior might
be of concern. In 1996, following a tender process,
the City engaged an event manager to produce
a fireworks show on Sydney Harbour, with family
friendly viewing areas, a Lord Mayor’s Party at the
Sydney Opera House, and a special viewing area at
the Royal Botanic Garden for orphans and disad-
vantaged children. The following year, the event
was expanded to include fireworks on the western
side of the Sydney Harbour Bridge, a lighting effect
on the eastern face of the Bridge, and the first parade
of vessels (later to become the Harbour of Light
Parade®).
In 1999, the event celebrated the millennium and
also featured a light parade of sea creatures on
barges on Sydney Harbour. By 2000, the production
and delivery of the event was managed fully in-
house, by the City Council. The fireworks displays
were expanded that year to include pyrotechnics
fired from the rooftops of seven city buildings, in
addition to the Sydney Harbour Bridge, and also

from barges on the eastern and western sides of the
Harbour. In 2003 and 2004, the artistic theme
was extended and tied to other art installations,
such as the City of Light, featuring the lighting
of sixteen CBD buildings for eighteen days
in January. An Artistic Director role was added in
2002. Initially, the engagement of key creative
personnel (Artistic Director, Soundtrack Producer,
Performance Director) was done directly by the
City, but by 2011 the provision of creative services,
such as entertainment, was outsourced via a tender
process. As part of creatively refreshing the event
each year, changes to the pyrotechnics have
occurred over time, including the addition of short
displays between the 9 p.m. and midnight displays;
Jet Skis firing fireworks; and use of the “sails” of the
Sydney Opera House as a firing location.
Partnerships and associations with media organi-
zations, involving radio and television contracts,
have been part of the event for many years. There
has been a dedicated website for the event (www
.sydneynewyearseve.com) since 2008. The website
provides up-to-the-minute information about van-
tage points with links to traffic and transport infor-
mation. A mobile app was introduced in 2012 under
a corporate partnership with a telecommunications
company. Planning has taken a risk-based approach
and occurred through the collaborative efforts of
multiple State agencies and landholders. The City
provides leadership for event planning, supported
by the NSW Department of Premier and Cabinet.
Issues around crowd safety were linked with
alcohol consumption and an approach known as
“managed access” (no BYO [bring your own]
alcohol or glass) to various vantage points has
been gradually implemented around the harbor.
The most popular vantage points are operated by
a range of different landholders including Sydney
City, Sydney Harbour Foreshore Authority, North
Sydney Council, Sydney Opera House Trust, Royal
Botanic Gardens & Domain Trust, and NSW
National Parks and Wildlife Service. Other venues
around the city and suburbs are equipped with live
screens to show the fireworks and to deliver com-
munity services announcements. Approximately
1 million people watch the fireworks directly from
various vantage points around the Harbour and
many more participate at other venues.
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An Inherent Complexity 319
In spite of the complexity of the project and the
propensity for emergent risk events, the project
team has successively developed, consolidated,
and refined processes that have resulted in repeated
successful delivery of the event. As impressive as is
the management of this project is, the main interest
for this discussion is the manner in which the project
has evolved over time. This has occurred through
coalitions of interest responding to emergent risk
patterns. One indirect consequence of the successful
management of the Sydney Fireworks each year
affects the culture of the host organization. Local
government departments are generally not known
for innovative approaches. Largely because much
local government work is concerned with ensuring
compliance with statutes and regulations, cultures
within local government departments tend to be
conservative. However, it has been noted that an
unusual culture now exists within many depart-
ments in the Council. They “. . . are more likely to
approach extremely challenging creative projects
with a ‘can do’ attitude, that was not always there
in the past” (Interview with the Producer). This
change of attitude applies not only to innovations
associated with the Sydney New Year’s Eve
Fireworks team, but also to proposals for innovative
and technically challenging, large-scale art works
across the city. Of course, it is impossible to directly
attribute this prevailing attitude to one program, but
the change has been noted by interviewees.
However, the most profound consequence that
appears to relate directly to the evolution and
management of the Sydney New Year’s Eve
Fireworks is that it has influenced the way local,
state, and federal government agencies now
approach a whole range of complex challenges.
The stimulus presented by the program has been
a significant contributor to a “whole of govern-
ment” approach to management. The collabora-
tive approach emerged from the need to more
effectively manage huge crowds, following some
early aggressive behavior, which resulted in injury
to people and damage to buildings near the Sydney
foreshore. Initially, the process involved bringing
to the table the NSW Police, NSW Parks, Sport,
and Recreation and the agencies responsible for
roads, traffic, and waterways to collaboratively
find solutions. Over the years, this was expanded
 320 Kaye Remington
to include several other government departments
and key stakeholders. Experience with the
Sydney Fireworks became the model and testing
ground for crowd management at the Sydney
Olympics. “Whole of government” approaches,
involving interdepartmental, cooperative manage-
ment groups, in which no one department or single
leader overtly takes the lead, have now become the
norm across Australia.
I suggest that the propensity for a program or
project to have a strong effect on its parent organi-
zation and on its environment is related to the level
of complexity that characterizes the project. In the
case of the Sydney New Year’s Eve Fireworks the
nonlinear behavior stems directly from the number
of stakeholders with strong and often competing
interests in the project. These powerful stakeholders
can interact in unpredictable ways and their actions
en masse cannot be accurately predicted, controlled,
or even influenced by planners or local managers.
The speed at which emergent risk patterns can occur
is related to the number of diverse stakeholders and
the extreme vulnerability of the project to crisis
events, such as panic or “crowd crush” (associated
with unexpected overcrowding of some vantage
points), aggressive behavior (due mainly to alcohol
or drug abuse), or even to potential acts of terrorism.
Any of these situations might result in injury or loss
of life. The impact of communication and media,
particularly the effect of social media, is unpredict-
able, and might also contribute to rapid escalation of
problem situations. However, the media, particu-
larly social media, also provide a major stimulus
for the project and good media are critical to its
success, nationally and internationally.
Impact on the Host Organization
and the Environment
Drawing upon the work of both Elias and Stacey,
the Sydney New Year’s Eve Fireworks project can
be described as having evolved over time to effect
changes to both its host organization and its envir-
onment. This has been achieved not through the
action of a single leader, but through the action of
coalitions of individuals who have addressed chal-
lenges as they have emerged. Planning does occur
as an intensive ongoing activity; however, the
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planning process is seen by participants to
contribute to adaptation and learning. The focus is
on the planning process as opposed to a grand plan
because the project team recognizes that collabora-
tive planning activities form the basis for evolution
and innovation. Innovation occurs through contin-
uous knowledge exchange involving many different
players. These regular exchanges produce unex-
pected connections and emergent outcomes which
are critical to problem solving.
When I asked the Producer (similar role to
Program Director), about the “leadership style”
that was most successful, he replied that “there
had to be a strong emphasis on collaboration”
(Interview with the Producer). He viewed his role
predominantly as that of a facilitator of dialogue
between disparate groups rather than a “leader”
who sets direction and drives the project to comple-
tion. Learning capture is very high in this project
because the project has been repeated over several
years, and it has been sponsored, in the main, by one
organization. The project has itself become a mini-
“temporary organization” with a permanent
small team. Unless the sponsoring organization is
founded around projects, as in the construction
industry, this favorable conjunction is not available
to many other projects of this scale. However, the
collaborative “whole of government” approach that
emerged in the early years of this project has
expanded to include many more players and has
also meant that critical information transfer is now
efficient, not linear but very effective. It is unlikely
that the “whole of government” approach would
have evolved and expanded to influence other
areas of local, regional, and national government,
if the project had not been complex, if there were
not large numbers of highly influential stakeholders,
or if the interaction of those stakeholders and the
results of nonlinearity, positive and negative, had
not stimulated innovation.
Case Study 2: Application of Cross-sector
Collaborative Management
Project (or program) Wickenby is an example of the
“whole of government” approach to complex initia-
tives that has become the norm in many Australian

government sectors. This program, led by the
Australian Taxation Office (ATO), became the cen-
ter of a successful global attack on tax fraud using
international cooperation to detect, deter, and dis-
rupt the abusive use of tax havens. The high level of
complexity associated with this is a multinational,
multidepartmental program of projects deriving
from the interagency, international nature of
Project Wickenby, with its diverse and ever-
changing groups of stakeholders. In Australia, the
program requires the full cooperation of seven
national government departments plus a similar
number of departments in each state jurisdiction.
Internationally, it involves an alliance of four core
countries and a number of other jurisdictions and
international forums such as the OECD. Individual
projects within the program target individuals,
companies, intermediaries, and tax scheme
promoters. Stakeholders range from being fully
supportive of the Project through to extremely
antagonistic. The multitude of stakeholders,
including Government, several agencies within
each Government, local communities, the media,
international tax havens, and tax evaders have
competing interests and different cultures. One of
the biggest challenges proved to be the distinctly
different cultures that had developed in different
government departments. For example, the
Australian Federal Police shared language, culture,
and processes with Interpol and the FBI, but there
were clear challenges for sharing of information
between key Australian government departments.
Privacy legislation, discrete and specialized IT
systems, specific professional languages, and dif-
ferent values inhibited knowledge sharing.
Governance of such a complex program meant
that normal guidelines for project governance
would be difficult to apply. To develop construc-
tive alliances with appropriate agencies, locally
and internationally, the ATO adopted a govern-
ance philosophy that was highly collaborative.
While remaining the lead agency in terms of
accountability to Government for the effectiveness
of the program, the ATO project team described
itself as “first among equals” (Interview with
a former Project Director). Although there were
single points of accountability within each agency,
every significant decision had to be negotiated
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An Inherent Complexity 321
across agency and internationally. To do otherwise
would have jeopardized the alliances, which were
critical to success. However, this led to scheduling
implications. For example, by the time a tax
evasion or fraud was identified, often using the
combined intelligence and powers of a number
of agencies across international boundaries, the
evidence was likely to have been moved to another
tax haven via a complex chain of transfers. Project
teams could never “act as fast as the money can
run” (Interview with a former Project Director).
The “whole of government” approach used in
Project Wickenby is a now seen as model for
future interagency projects. Senior program and
project leaders stressed that future projects of this
kind will need to incorporate the kind of iterative,
collaborative approach to management that was
used for Project Wickenby.
The Project operated in a turbulent global
financial landscape. The regulatory environment,
both in Australia and internationally, is constantly
changing. For example, the collection of evidence
internationally is bound by legislation and court
processes in foreign jurisdictions, which can be
difficult to understand. Obtaining the evidence can
take years, involving numerous legal challenges,
before it even arrives in Australia. In turn, in order
to utilize this evidence in Australia it must meet the
relevant State or Federal legislation, which is also
subject to change as loopholes are revealed. For the
project leaders there was constant uncertainty about
whether the courts would uphold convictions and,
therefore, whether there would be any return for
the effort expended. This kind of uncertainty can
negatively affect team morale.
Leadership capability for this kind of program
required a deep understanding of how complex
adaptive systems function. Teams selected tools
and methods from multiple paradigms, ranging
from “soft systems thinking” to more standard
hard systems approaches. Traditional best practice
project management approaches were often found
to be limited in their effectiveness and were
discarded in favor of new tools and strategies
developed through a deeper understanding of
complex systems. The actions in one project often
had a ripple affect across other projects within the
program and into the host organization’s business as
 322 Kaye Remington
usual. In order to cope with the uncertainty, the
project teams had to learn to be adaptive, respond
flexibly, and behave opportunistically, in order to
mitigate emergent risk patterns. For example, when
access to bank records from a number of tax haven
countries around the world was finally obtained,
insights were gained into a previously unknown
world of finance. This immediately enhanced the
ability of countries to work collaboratively across
international borders to deal with international tax
fraud.
External and internal environmental impacts
were frequent and difficult to anticipate. For exam-
ple, the Project suffered a major reputational set-
back, and potential loss of government funding,
when media attention garnered support for a local
celebrity figure, who had been targeted for tax
evasion. Project leaders observed that static or
rigid approaches to management seemed to prevent
teams from being adaptive, hindering them from
seizing new ideas or acting rapidly to prevent
a project from to spiraling out of control.
Mechanistic approaches also seemed to negatively
affect teams’ resilience and morale. Project leaders
worked to inculcate an iterative approach, in which
new learning was rapidly incorporated into manage-
ment processes. Teams were carefully selected and
encouraged to learn to adapt rapidly to be able to
manage resources in a timely and efficient manner.
At the same time, team members had to be able to
work diplomatically, with constantly changing sta-
keholder groups, in highly sensitive contexts.
A climate that supported rapid flexible responses
to work was culturally counterintuitive in an
organization that normally fosters methodical, rule-
bound approaches to work. It was fortuitous for this
program that key executive leaders in the ATO had
sustained an interest in soft systems thinking and
complexity. A deep understanding at the executive
level meant that project leaders had the support to
enable them to work differently.
Environmental instability also came via pressure
from different national governments who used the
project as a “fall guy” to discredit previous govern-
ments. This, and intermittent disappointing results,
resulted in periodic threatened withdrawal of fund-
ing. However, this project has been an overall
success. It has been instrumental in changing
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a national culture with respect to taxation fraud
and has had significant impact with international
jurisdictions. After many years of disappointing
results, the statistics are now encouraging.
The complex nature of this project and the way it
was managed through flexible alliances impacted
not only the host organization but also other
organizations. “The new Serious Financial Crime
Taskforce, which began operating on 1 July 2015,
will build on the success of Project Wickenby,
which has led to over $2.2 billion in tax liabilities
being raised, as well as increased tax collections from
improved compliance behaviour following high pro-
file investigations, prosecutions and sentencings”
(www.ato.gov.au/General/The-fight-against-tax-
crime/News-and-results/Project-Wickenby-has-deliv
ered/; accessed April 17, 2016).
Conclusion: An Open Secret
Because most executive leaders know that the out-
comes of strategic planning exercises are educated
guesses at best, and that cause and effect are often
untraceable, there is increasing interest in holistic
management structures similar to the “whole of
government” approach discussed in the case studies.
Particularly in contested complex environments,
such as the public sector, program and project man-
agement practice, if it is to remain relevant, needs to
work effectively within and alongside dynamic sys-
tems. Large programs and projects, delivered within
complex organizations, are highly susceptible to
failure. This is due to many factors: because the
programs or projects were ill-conceived in the first
place; because sponsorship is uncommitted or inept;
because the environment has changed radically
since inception; or because they are managed from
a perspective that does not support adaptiveness and
emergence. As we have seen, in collapses such as
the Global Financial Crisis of 2008, the nonlinear
associations between cause and effect in complex
contexts reduce the propensity for individual
accountability. Projects, however, are highly identi-
fiable elements. Project leaders and their teams are
therefore exposed, vulnerable, and in a position to be
held accountable for project failures which might, in
truth, be due to larger systemic failure.

Project management, as traditionally understood,
is predicated upon the idea of an objective, potent,
manager and team who plan delivery of predeter-
mined outcomes. This idea of leadership has been
challenged. The more complex the program or pro-
ject, the greater the propensity for emergent beha-
vior. The more complex the program or project, the
more wide-ranging its impact on the organization
and the more likely that deliverables will diverge
and become unaligned with the organization’s
trajectory. Even if some programs and projects
can be conceptualized in terms of linear relation-
ships within the project jurisdiction, they are
often enacted in environments that are dynamic.
If we accept that persistent ambiguity, nonlinear
relationships and emergence exist in the organiza-
tional domain and that the associated uncertainty
will affect leaders’ ability to plan strategy and
predict the future, we must also conclude that
many projects, conceived out of this rational
constructivist approach begin life with a fatal flaw.
In order to provide value, OPM as a concept must
provide insights and approaches that resolve these
challenges.
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 CHAPTER
22
Organizational Project Management
and Sustainable Development (SD)
Managing the Interface of Organization
and Project SD Benefits
LYNN A. KEEYS and MARTINA HUEMANN
1 Introduction
Sustainable development (SD) is a strategic issue
for organizations and integrates and impacts the
management of projects at all levels of the project
oriented-organization – strategic, portfolio, pro-
gram, and project levels.
The Rio Declaration on Environment and
Development (UNCED, 1992) called on businesses
to sustainably manage their enterprises, which
requires mainstreaming SD principles throughout
their core business operations and activities. SD is
defined as meeting the needs for the well-being of
the present generation without jeopardizing the abil-
ity of future generations to meet their needs. SD
places human well-being at the center of sustainable
development in an intricate cohesive relationship
and is concerned with meeting societal needs for
a “healthy and productive life in harmony with
nature” (UNCED, 1992) in the short, medium, and
long term (WCED, 1987). As a holistic manage-
ment paradigm, SD is concerned with economic
growth, environmental safeguards, and societal
well-being aspects of all development activities,
commercial and noncommercial. SD is a system
concept and focuses attention on the complexity
that results from the interaction between environ-
mental systems and social systems, such as compa-
nies and projects, which comprise the world SD
system.
Projects are increasingly recognized as strategic
and instrumental for organizations in bringing about
growth, organizational change, and innovation in
response to demands in a dynamic and complex
326
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environment. Business (organizations and projects)
is largely responsible for value creation, growth,
and employment generation, and yet, as a SD sys-
tem actor, it is largely viewed as a major source of or
contributors to economic, environmental, and social
problems (Porter & Kramer, 2011; Elkington,
2008). Thus, SD is relevant for companies and the
projects they create.
The goals of organizational project management
(OPM) and SD are potentially aligned and mutually
reinforcing. The OPM goal is the coherent manage-
ment of the network of projects in an organization to
maximize value (Aubry et al., 2007) in relation to
the organization’s strategic intent and business
objectives. The SD goal at the organization and
project level, often called corporate sustainability
and project sustainability, respectively, is value and
benefits creation for the particular organization
while contributing to the sustainable world goal
(Dyllick & Hockerts, 2002; Dunphy, Griffiths, &
Benn, 2007). SD requires a broad benefits focus that
encompasses multiple and varied actors or stake-
holders, who influence and determine value and
benefits. This requires coordinated, aligned and
synergistic efforts linking levels of the organization
and influences the structure, process, and manage-
ment of projects, programs, and portfolios.
The integration of SD in OPM in the project-
oriented organization offers the opportunity to max-
imize and transform value creation and benefits to
achieve “sustainable” (Hart, 2003) or “shared”
(Porter & Kramer, 2011) value by and in projects.
The integration of SD as a dimension of OPM can
enhance value creation by projects but will require

a more dynamic management, enabling flexibility
for learning, adaptation, emergence, and transfor-
mation of approaches at the project, program,
portfolio, and strategic levels, and the develop-
ment of capabilities to manage efforts. The
assumption here is that the consideration of SD
principles in managing projects does not increase
the complexity, but makes the existing complexity
more visible. Thus, managing projects becomes
increasingly an attempt of decreasing complexity
to achieve project benefits, program benefits, and
portfolio benefits.
With this aim, this chapter presents
a framework for appreciating the issues related to
the integration of SD for “shared” or “sustainable”
value and benefits creation as a dimension of
OPM. Organization governance and strategy are
starting points for the foundation for OPM. OPM
and SD integration occurs around achieving busi-
ness results and holistic benefits. It concerns the
nature of strategy and structure, stakeholder man-
agement, process, capabilities, risk and opportu-
nities, and learning integration in portfolio,
program, and project management. Sustainable
OPM is a nascent area of research and practice,
with little to be found in the literature. This chap-
ter aims to build knowledge, understanding, and
insight by drawing on conceptual and empirical
research in strategic management, project, and
program management, and SD.
Sustainable Development: Dynamics
of Management Process and
Transdisciplinary Content
SD is a systems concept that illuminates holistically
the complexity of the world in which we live.
As such, it is intended as a holistic management
paradigm for the world system. In this world sys-
tem, organizations and projects, among other social
systems and organisms, are actors in continual
engagement with the environmental system that
produces the ecology. This engagement occurs in
an open environmental system, which is subject to
continuous fluctuation as a result of these interac-
tions (Roome, 2012). SD concerns transdisciplinary
content involving the integrated dimensions of
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OPM and Sustainable Development 327
economic, ecological, and social concerns.
The Brundtland Report (WCED, 1987), Our
Common Future, called for consensus on the
macro framework of SD, based on a broad definition
yet requires interpretation of the concept at the local
level with all those concerned.
Since SD requires interpretation of the issues at
the local level or context, the SD content is highly
contested in the management area (Gladwin,
1995) in general and is subject to numerous
terms, definitions, and interpretations in research
and practice (see Ebner & Baumgartner, 2006).
Many terms, such as corporate social responsibil-
ity, corporate sustainability, societal issues,
corporate responsibility, and triple bottom line
are used, along with SD.
Further, philosophical differences underlining
the SD concept create tension and disagreements
in approaches. These philosophical differences are
rooted in three different perspectives: (1) the cur-
rent SD system is unviable and approaches to
development must change; (2) the current system
and approaches are viable with the introduction of
new technology to mitigate damage and decrease
emissions, such as emphasis on “going green”;
and (3) the right approach is a middle ground
between the former two (see Schaltegger &
Burritt, 2000; Steurer, 2005). Evidence of these
philosophical differences are easily discerned at
international SD fora concerning climate change,
pollution, and other global issues, and in various
global, regional, and local standards, such as the
UN Global Compact, Global Reporting Initiative,
World Business Council on Sustainable
Development, ISO Standards on Environmental
Management and Social Responsibility, and
various stock market SD indices, and the
European Union. (See annex for an illustrative
list of general SD standards.) Difficulties in
integrating SD in core organizational processes
can be attributed largely to the ambiguity, distinc-
tions, and disagreements on content, which
mutually influence process, made even more
complex by the required engagement with multi-
ple SD actors. This chapter cannot resolve this
issue but will address the implications of the
dynamic between the management process and
the SD content when considering SD in OPM.
 328 Lynn A. Keeys and Martina Huemann
SD and sustainability are often interchangeably
used although their meanings are distinct. As SD is
intended as a new management paradigm, it is
important to establish a definition for SD that dis-
tinguishes content from process. “In essence, sus-
tainable development is a process of change in
which the exploitation of resources, the direction
of investments, the orientation of technological
development; and institutional change are all in
harmony and enhance both current and future
potential to meet human needs and aspirations”
(WCED, 1987). SD is defined here as a process, in
particular, as a change process, which is distinct
from the favorable outcome of sustainability
which is an ongoing dynamic as a result of the SD
process. From a systemic point of view, the out-
come depends on the process taken to achieve the
outcome. The outcome quality increases with the
quality of the process. One quality measurement of
process quality is the cooperation and engagement
of stakeholders.
As a management paradigm, SD prioritizes
values of transparency, participation, and equity
in the management process regarding its interpre-
tation at the local level, its broad benefits, and
intra- and intergenerational focus implied by the
definition. As SD is influenced and interpreted at
the macro- and microlevels of the SD system,
involving, global, regional, national, and local
issues, all those who have a stake in the system
are involved in its interpretation. Thus, the SD
process involves agreement on an operable defini-
tion that is constantly evolving with SD system
issues and concerns of stakeholders in the system
and requires constant learning, adaptability,
emergence, and transformation in practice and
dynamism in management.
SD and OPM integration will require internal
organizational consensus. This organizational con-
sensus begins with the agreement and understand-
ing of strategy. The integration of SD in strategy
will align the organization on definition, content,
and process. Yet, at the same time, organizations
require flexibility, adaptability, and construction
with actors to be able to respond to the dynamic
environments where organizations and projects
operate. In the project-oriented organization, pro-
ject structures are needed to facilitate strategy
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alignment along with strategy emergence and trans-
formation with other actors in the organizational
(and project’s) operating environment. This will
enable projects to address evolving SD challenges
and create value and benefits for a broader group
of stakeholders, as implied in the macro SD
framework.
Sustainable Development: Organization
and Project Perspective
SD Strategic Interface
SD presents the opportunity for holistic manage-
ment, revealing more fully the operational context
of organizations and projects, linking the
organization and project, at the interface of orga-
nization and project strategic intentions, structure,
processes, and activities to achieve robust main-
streaming of SD principles at the organization and
project level.
Both permanent organizations and temporary
project organizations operate in the SD system
where knowledge flows from the system macro-
level to the microlevel. The project is defined here
as a temporary organization (Lundin &
Söderholm, 1995) and social system (Luhmann,
1995; Gareis, 2005). A project, as a temporary
organization and social system operates within
two contexts (Bakker, 2010) – the internal envir-
onment of the parent organization and the broader
social context at the micro level of the SD system.
In the SD system, understanding of the problem
flows from larger systems to smaller systems
(Bagheri & Hjorth, 2007). Projects can be consid-
ered as smaller systems and subsystems within the
micro-SD context where the parent organization
operates. As a smaller system or subsystem, pro-
jects can be viewed as the object of the parent
organization’s efforts to mainstream SD princi-
ples into core business processes and activities
(Keeys et al., 2013), in the assumption that with
a project change can be organized.
From a systems perspective, projects can be
considered “faster, smaller cycles of innovation”
(Hollings, 2001) than the parent organization and
able to respond with greater agility to issues such as
risk, and to learn, adapt, and transform regarding SD

Sustainable Development System
SD system actor
corporate project environment
Portfolio A
SD Program
system
actors Project
Project
Project Program
Project
Project Project
Project
Hierarchy of projects within SD system.
Figure 22.1. Illustrative hierarchy of projects as system actors within SD system (copyright © 2014 by
Lynn A. Keeys)
challenges and opportunities for creative change.
The nature of SD requires constant adaptation and
innovation, involving the transformation of ideas
into new or improved processes, products, and ser-
vices to meet the value creation needs of the orga-
nization and the larger SD goal (Baregheh, Rowley,
& Sambrooks, 2009). Therefore, projects are impor-
tant contributors to the SD integration efforts of the
parent organization. As projects operate in the par-
ent context and not in isolation (Engwall, 2003), SD
by projects should not be delinked from the parent
or investor organization’s SD mainstreaming
efforts.
While important contributors to the SD efforts of
the parent organization, projects are the subject of
their own SD efforts. Operating at the subsystem
level, projects are able to engage stakeholders in the
project context at ”eye level,” where they are able to
identify more closely with SD system actors and
identify SD concerns regarding specific project and
corporate activities. From this perspective, they are
able to inform and form the strategic aims of the
parent organization while ensuring its success
regarding SD concerns about the project and project
outcomes. Here we can also distinguish between the
SD outcome in terms of project outcome and inter-
nal SD involving the application of SD principles to
the project team itself as part of the network of
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OPM and Sustainable Development 329
SD
system
actors SD
Project
system
actors
Portfolio B
SD
system SD
Program Project actors system
actors
Project
Project
projects and organizational processes within the
parent organization. As a social system, a project
learns and adapts within the OPM context in
response to interaction with stakeholders within
the parent organization and outside the project net-
work beyond the boundaries of the organizational
superstructure of projects. See Figure 22.1.
As a social system, a project has an identity and
perspective – as asserted by Luhmann (1995) and
concluded by Grabher (2002) – as a collaboration in
examining projects with identity and perspective.
A project is distinct from its environment and at
the same time related to it (Luhmann, 1995); or, as
Engwall (2003) puts it, “no project is an island.”
Thus, managing the (social) contexts of any project
is essential for achieving the objectives and desired
outcomes.
Projects are capable of integrated thinking and
acting with stakeholders – learning, adapting,
considering strategic options and cocreating with
stakeholders in response to complexity in the oper-
ating environment (Artto et al., 2008; Keeys &
Huemann, 2017). Figure 22.1 shows the individual
project engaged in the project and parent organiza-
tion contexts. In the parent context, the individual
project responds to the aims, structure, norms, and
culture of the parent organization. The interaction
within the parent organization environment
 330 Lynn A. Keeys and Martina Huemann
PROJECT AS TEMPORARY
ORGANIZATION AND SOCIAL SYSTEM
External
Parent
organization
Internal
Project
organization
Context
Other
stakeholders
Figure 22.2. Individual project SD system actor (Keeys, 2014)
includes interaction with the network or hierarchy
of projects, as illustrated in Figure 22.1. In the par-
ent organization, the project must find its niche or
competitive place which enables it to strive, achieve
its objectives, and meet the needs of the parent orga-
nization that created it. In the larger environment, as
an SD system actor, the project must interact with
other SD actors, each having an impact on the SD
system and each with its own aims and strategic
position. See Figure 22.2. Project interaction with
actors in this larger SD environment, illuminating
the complexity that exists, requires defining SD con-
cerns and defining and delivering benefits to different
stakeholder groups regarding the larger SD goal and
project-specific concern. This interaction is not iso-
lated from the project’s interaction within the parent
environment. The project interaction requires align-
ment with parent organization concerns with a view
to adapt and adjust, emerge, or even reconstruct its
aims and strategy with other SD system actors within
the larger SD system.
Defining Project SD
To date, SD in and by projects has largely been
addressed from the individual project perspective,
with less attention to organizational strategy and
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Customers
Beneficiaries
Regulators
Labor
Interest groups
Competitors
issues of integration of SD at the corporate level,
and portfolio and program levels as an overall
organizational project management approach.
At the same time, literature on corporate sustain-
ability strategy (or SD at the organizational level) is
significant but does not specifically address how
projects influence the integration of SD throughout
the organization (for example, see Dyllick &
Hockerts, 2002; Linnenluecke, Russell, &
Griffiths, 2009). Project, program, and portfolio
management (PPPM) standards and organizational
project management maturity models, in general, do
not specifically define how SD relates to the man-
agement of projects (Silvius, 2015). However,
important approaches and models have been identi-
fied in research which help to define SD at the
project level and impacts on particular project man-
agement processes.
Research shows that project SD is challenged by
multiple definitions and approaches as with the
broader SD concept and SD at the corporate level.
These are influenced by industry (Eid, 2013); the
predominance of particular SD issues, such as
environment, and the search for project-level frame-
works (Labuschagne, Brent, & Claasen, 2005);
criteria, indicators, and assessment tools to guide
SD integration (Presley, Meade & Sarkis, 2007;
 OPM and Sustainable Development 331

Silvius & Schipper, 2010; Talbot & Venkataraman,
2011). Pertinent SD issues, primarily environmental
and to a lesser extent social, have driven SD
research. SD in the construction industry (e.g.,
Edum-Fotoe, 2008; Khalfan, 2006) is an important
focus, since it is often viewed as having an impor-
tant impact on the environment. Research also
focuses on specific tools, such as life cycle manage-
ment (Labuschagne & Brent, 2004) and value man-
agement (Al-Saleh & Taleb, 2010; Zainul &
Pasquire, 2007) for applying SD principles to pro-
ject processes. Researchers have offered distinct
definitions for SD in projects, focusing on assess-
ment tools and frameworks for SD process and
content (e.g., Tam, 2013; Silvius & Schipper,
2012). The literature differs in discussion on content
and process (see Silvius and Schipper, 2014, for
a structured review of literature on sustainable pro-
ject management).
In differentiating the process versus content chal-
lenge, six guiding principles of SD that can be
applied to managing projects and programs have
been distilled (Gareis et al., 2013; Silvius et al.,
2012): (1) balancing economic, social and ecologi-
cal orientation; (2) balancing short-, medium- and
long-term orientation; (3) balancing local, regional,
and global orientation; (4) risk reducing; (5) values
and ethics based; and (6) participation and capacity
building. This process definition, considered in con-
junction with the transdisciplinary content defini-
tion and guidance from standards, is helpful for
identifying SD issues for projects as well as for the
corporate SD level.
In essence, SD is a value-based concept; it broad-
ens the scale and the time frame and asks for differ-
ent behavior. This is why authors hold that
considering SD principles in managing companies
requires a paradigm shift (Gareis et al., 2013).
However, project-oriented organizations seem to
be quite well-equipped to deal with these values,
especially when it comes to stakeholder-orientation,
learning and change (Huemann, 2015). See
Table 22.1 on project-oriented culture.
While project research shows that corporate SD
support influences how SD is integrated into project
management, it has not yet been addressed holisti-
cally in projects from a strategic perspective within
the context of corporate SD mainstreaming aims
and organizational project management.
The integration of SD principles in the project
initiation process where the investment proposal is
assessed was proposed (Gareis et al., 2013), so that
it becomes relevant at the project portfolio level.
It is a strategic decision to take on new projects into
the project portfolio. The business case plays an
important role in these decisions. However, if

Table 22.1 Project-Oriented Culture

Project-oriented culture

Empowerment Increased autonomy and responsibility

Empowerment on all levels
Team-orientation Teamwork and cooperation, instead of excessive functional differentiation
Stakeholder-orientation Value-creation for customers and other stakeholders
Co-operation with customer, suppliers and other stakeholders on a project
Process-orientation The characteristics of the process as the basis for organizational design
Processes as the basis for project work
Project management, program management, portfolio management as processes
Diversity Diversity as differences and commonalities
Diversity as a potential for project work
Learning-orientation/innovation Projects promote learning and innovation
Encouraging coproduction of knowledge on the project with customers, suppliers and
partners
Change-orientation Encouraging continuous and discontinuous organizational change
Adapted from Huemann, 2015.

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 332 Lynn A. Keeys and Martina Huemann
corporate sustainability strategy is not considered in
the portfolio management, it will most probably not
find its way into the business case: thus might easily
be overlooked in the project initiation process.
Research by Silvius, Schipper, and Nedeski
(2013) on the application of an SD maturity model
for project management in fifty-six case studies
suggests that the inclusion of SD principles in pro-
jects is related to the existence of SD in corporate
strategy but the desire alone for SD in projects is not
sufficient. This seems to support the idea that SD
approaches in projects need to be situated within the
context of corporate strategy.
Project SD is linked by an interdependent rela-
tionship with SD at the corporate level and strategy.
SD in and by projects needs a strategic focus for
successful SD integration that proceeds from the
governance level of the organization down through
strategy, portfolio, program, and project levels.
OPM is about managing the network of projects
for beneficial change and innovation. Many
businesses have yet to achieve this strategic focus,
which is the missing link or SD nexus that integrates
SD in projects and in parent corporations. This
strategy nexus can be address with the integration
of SD in OPM at the benefits interface as a function
of the project-oriented organization.
Managing OPM and SD Interface:
The Benefits Realization Keystone
Both OPM and SD are concerned with the longer-
term impact of project outputs or the realization of
benefits. The benefits approach opens SD to the
strategy realm where OPM operates and where SD
inroads have been difficult. Benefits are defined as
“strategic improvements in the business” as “incre-
ments in business value” from multiple perspectives
including those of shareholders, suppliers,
customers, and society (Zwikael & Smyrk, 2011).
The realization of benefits requires determining
with stakeholders what is a benefit and what is of
value, which is in line with a stakeholder approach
of management that includes as many stakeholders
as possible and tries to create win-win situations in
cocreation processes on projects (Huemann,
Eskerod, & Ringhofer, 2016).
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Benefits creation is viewed as important for
project success and according to research conducted
by Silvius and Schiffer (2014), SD benefits should
be included in project success measures.
The individual project is not viewed traditionally
as producing benefits for the organization, where
benefits realization is usually considered
a deliverable of programs. Benefits realization man-
agement is considered a postproject concern where
the owner accepts delivery of the project outputs
(Sera and Kunc, 2015). However, benefits realiza-
tion management should begin at the project initia-
tion phase where the project is first linked to the
business objective. This connection to business
objectives continues throughout the project plan-
ning process and project execution (Badewi, 2016;
Breese, 2012). According to Breese, benefits man-
agement is steeped in ambiguity and complexity
and takes places in a dynamic context involving
a multiplicity of stakeholders to determine benefits.
Thus, SD and benefits management alike require
adaptive and emergent approaches. This departs
from the traditional “plan and then implement”
approach, which is based on control and predict-
ability in the project environment that separates
planning from implementation (Mintzberg &
Waters, 1985). SD places a mirror on the true com-
plexity and ambiguity in the project environment
where there is a need for adaptation and emergence
of approaches. Benefits realization that embraces
the need for interacting with stakeholders in context
in an adaptive and emergent fashion appears key to
SD benefits realization.
Taking a benefits approach to SD and OPM
enables projects to take a long-term perspective
that is commensurate with the short-term, med-
ium-term and long-term concerns of SD and
longer-term value creation and benefits horizon
of organizations. Projects are not traditionally
viewed as compatible with the longer-term orien-
tation of SD, given the focus on outputs and opera-
tional orientation around the iron triangle of
scope, schedule and budget. However, under-
standing the relation between project and invest-
ment, which is that a project initializes an
investment, the relationship of the short-term
project to a long-term perspective becomes
evident. The life-cycle planning and management
 OPM and Sustainable Development 333

Table 22.2 SD, OPM, and Project Compatibility

Sustainable Development Project Project and SD Potential Compatibility

Long-term and short-term
orientation
In interest of:
present generation
future generation
Life cycle orientation
People, planet, profit
Increased complexity
Adapted from Silvius & van der Brink, 2011.
Short-term orientation
In interest of:
project sponsor
project stakeholders
Deliverable/result orientation
Scope, time, budget
Reduced complexity
Temporary organization viewed with longer-term perspective
Social and value creation processes potentially compatible
with stakeholder approach & social learning with SD actors
Life cycle view as evolving & iterative connected with
product, service, & process lifecycle
Linked project & investment lifecycle enables consideration
of benefits beyond project
Social system with potential for social learning; integrative
action with SD actors; potential for entrepreneurialism

SD OPM Strategy
BENEFITS
KEYSTONE
Portfolios
Programs
Learning Projects
Structure
Integration

Risks
Opportunities BENEFITS
Stakeholders
REALIZATION

Capabilities Process

Figure 22.3. SD-OPM benefits keystone (copyright © 2016 by Lynn A. Keeys)

approach are key elements of SD (Robert et al.,
2002), which focuses on the impact of the project
output transcending the product or service life
cycle, and is related to value creation and the
realization of benefits beyond the project.
Table 22.2, illustrates how a benefits perspective
enables a longer-term view commensurate with
the concerns of SD and OPM and requires the
engagement of stakeholders to determine the
broad value creation and benefits intended by SD.
Thus, benefits realization is proposed as the “key-
stone” for the integration of SD in OPM. A benefits
approach to OPM and SD links SD to organization
strategy and business objectives. As an important
dimension in organizational governance, OPM
would ensure the alignment of organizational objec-
tives and appropriate support for projects to obtain
these business objectives and benefits. Given the
system nature of SD, continual flux of the state of
the SD system and context-based interpretation of

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 334 Lynn A. Keeys and Martina Huemann
the issues, determination of benefits, and under-
standing of value, benefits realization in SD OPM
will require dynamic management of keystone
dimensions. These dimensions are strategy, struc-
ture, stakeholders, process, resources, risk and
opportunity, and learning integration across the
framework of projects, programs, and portfolios.
There will be a need for an iterative interaction
within projects and across program and portfolio
to learn, adapt, align, and realign within estab-
lished boundaries of the parent organization and
the organizational context of the network of
projects.
Strategy
The Rapid Rail Transportation Project (pseudonym),
a multibillion dollar (equivalent) project was a public
private partnership to build an 80 kilometer passen-
ger rail line. The project brought together three pri-
vate global corporations (one of local origin) and the
local provincial department of transport and public
works, who was the project owner. The project
owner specified 22 targets for socio economic devel-
opment, including environmental sustainability.
Each company had individual SD aims which estab-
lished its priorities and value concerns, only one with
a formal strategy which was not fully integrated
in core business processes. No one individual
company’s strategy totally aligned with the SD
aims in the project. According to the first CEO of
the project management company, “There was no big
writing on the wall saying this is what our corporate
sustainability means . . . There was no sustainability
charter set out in the beginning.” As part of the
consortium, each private company had to adapt and
contextualize its strategy for the local project context
and partnership.
(Keeys, 2014)
SD integration in projects cannot be fully appre-
ciated outside of the corporate strategy context.
Typically, the network and hierarchy of projects
are expected to align with organization strategy
from a linear perspective, from planned strategy
followed by implementation. Research has shown
that the individual project’s desire alone for SD is
not sufficient to ensure SD by projects (Silvius,
Schipper, & Nedeski, 2013). SD as integral to the
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project owner’s core business strategy is important
for project SD. An organization approach to the
management of projects ensures links between
projects and organization strategy, business objec-
tives, and benefits realization. Yet at the same time,
SD strategy integration in projects cannot be under-
stood fully from a strategic alignment perspective
based on planned strategy. SD issues for strategy
formulation arise out of a multistakeholder context
where understandings are related to project identity
rooted in the participants and their affiliations
(Grabher, 2002) and varying perspectives concern-
ing what constitutes value and challenges of deliv-
ery of benefits to a broad plurality of stakeholders
(Winter et al., 2006). According to Mintzberg
and Waters (1985), emergent strategy is more
appropriate for environments characterized by
multiple, strong stakeholders while Stead and
Stead (2014) indicate that the nature of SD requires
“planned emergence” regarding sustainable strate-
gic management. Thus consideration of SD in
OPM would require a perspective of strategic
alignment, emergence, and realignment to enable
adjustment or contextualization of strategy to the
organization and project context, or the practice
of “strategizing in context,” in order to form
appropriate project strategy to address the benefit
creation concerns of the project. Again, this requires
dynamic management in response to learning at the
project level. As a temporary organization and
social system, a project can be concerned with its
success in its operating environment.
Structure
The Sustainable Agriculture Intensification Project
(pseudonym) was an internal project of the Balanced
Plant Nutrition Company (pseudonym), a global
company headquartered in Norway, that it conducted
in partnership with private and government entities.
The project was to contribute to the development of
the company’s sustainable business model for sus-
tainable agriculture in Africa. This was to be done
from an environmental and social perspective in
optimizing the use of fertilizer in a manner sustain-
able and compatible with the environment and cli-
mate change. The project evolved as BNPC quickly
began the fertilizer trials and brought in partners who

contributed knowledge and resources to the project.
The project took on a more formal structure as the
partners were able to figure out what was possible.
(Keeys, 2014)
As SD requires learning and adaptation according
to the context, projects require flexibility, which
has implications for structure at the project, pro-
gram, and portfolio levels. Learning, adaptation,
and transformation are important dimensions of
SD as a process. As a social system, a project’s
internal structure determines how it manages it
external relations with stakeholders and is able to
engage for learning and adaptation. Similarly, the
structure of programs of which a project can be
a constituent, requires flexibility to respond to
changes at the project level which are managed
in the project interface. Project structure can be
task based, based on prior planning, or goal
oriented, which enables the project to choose
options as it learns in its environment. Thus,
each level of the project hierarchy – project, pro-
gram, and portfolio – needs to be fashioned to
enable the identification of issues and learning
and the subsequent adaptation at each level of
the project hierarchy that arises from interaction
with SD actors regarding interpretation of SD
issues and determination of SD benefits.
Stakeholder Management
and Engagement
The Sustainable Agricultural Intensification
Project (pseudonym) brought together commer-
cial, university and government partners in
a collaborate process. No one stakeholder had
complete knowledge and skills for achieving the
project objectives. At the same time, stakeholders
brought to the project different value creation
aims and perspectives concerning possible pro-
ject benefits. The project owner was committed
to a transformative approach with its partners,
rooted in a non-hierarchical approach.
The stakeholders worked at “eye to eye” level
which required building trust and employing
engagement methods that considered the indivi-
dual practices, routines and norms of the actors,
as well as their particular knowledge, resources,
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OPM and Sustainable Development 335
and value creation concerns, to enable a co-
creation of innovative approaches and outcomes.
(Keeys, 2014)
Although associated with SD, stakeholder
management is a dimension of strategic manage-
ment of the organization, developed by Freeman
(1984), an approach to create innovative approaches
in collaboration with organization stakeholders
in dynamic and uncertain environments.
The integrative thinking and action requirements
of SD requires stakeholder management approaches
that incorporate multiple perspectives in the project
to address SD concerns and ensure societal as
well as individual organization value creation.
Stakeholder management involves the approaches
to relating to stakeholders at the organizational level
and how projects identify and relate to stakeholders
at various levels of the project hierarchy. SD is
about value creation and benefits to a broad group
of stakeholders beyond the individual organization
and its shareholders. This requires integrated
thinking and acting on the part of SD system actors
(Roome, 2012). Understanding SD system needs
in relation to its actors would also call for evaluating
SD system needs in relation to the project and
stakeholders as actors in the SD system.
Stakeholders should be identified and engaged
early at the initiation phase in projects and
programs.
The manner in which stakeholders are engaged
is an issue at the project, program, and strategic
level of the organization. SD requires stakeholder
engagement approaches that enable incorporation
of multiple points of views in the development of
projects, programs, and portfolios regarding the
realization of benefits. Appropriate engagement
of stakeholders will enable the cocreation of
benefits with a broad group of stakeholders,
maximizing organization value creation and
benefits realization. Information access and trans-
parency that are symmetrical between the broad
group of stakeholders, project organization, parent
organization and network of projects is the basis
for a cocreation approach to benefits. Knowledge
about SD issues is distributed; in a pluralistic
context, stakeholders may have better information
 336 Lynn A. Keeys and Martina Huemann
and knowledge concerning “correct” SD
approaches and priorities in their subject areas.
However, not all concerns can be addressed
and trade-offs may be necessary. Stakeholder
engagement that supports cocreation will require
the development of routines and dialogue that
converge the SD value system (which includes
values of participation and transparency) with
commercial value systems in order to accommo-
date the values of diverse stakeholders.
Process
The Balanced Plant Nutrition Company (pseudo-
nym) as project owner, had set specific targets for
fertilizer optimization, crop production, nutrition
and protection. However, as part of the learning
process with stakeholders, the project had to make
adjustments—some targets were added; others
deleted. The project had core targets related to the
optimization of fertilizer with decreased environ-
mental and climate impact which could not be
changed. The project strategy was to be practical.
The project manager indicated they needed at least
one target to which each stakeholder would
commit in writing. Others could be of particular
interest to the stakeholders. In explaining an
iterative process, the project manager indicated
they needed to go through stages repeatedly and
agree. They would need “to decide with stake-
holders what should be in or taken out . . .. This
will depend on the results . . . Planning should be
there ideally, but sometimes you have to adapt
even the stage of strategizing to the development
of the outcome of the project.”
(Keeys, 2014)
Project management research has shown that SD
objectives and targets are best included at the
project initiation phase (Gareis et al., 2013;
Silvius, Schipper, & Nedeski, 2013). It is at this
point that the project is conceptualized, the rela-
tionship to strategy and investment cycle is iden-
tified, and the business case is articulated. Here,
the value concerns of the project participants
become clear. Appropriate project structure
would facilitate the participation of a broader set
of stakeholders at this point, which would enable
the process for elucidation and elaboration of
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value concerns. SD targets can be set which
would have originated in strategy, flowing from
portfolio selection to program to project.
However, this represents the beginning of the pro-
cess. As projects engage their context and SD
concerns are clarified or emerge with stakeholder
engagement, targets will need to be adapted,
revised, and added in response to stakeholder
value concerns, knowledge, and skills. Keeys
and Huemann (2017) report that targets are impor-
tant for SD benefits cocreation. The transparent
setting and adjusting of benefits targets are based
on learning with stakeholders and stakeholder
agreement and commitment to targets that are
interesting to them; this could mean adding targets
not previously envisioned based on new learning.
Interest can be related to incentives, penalties,
risks, or value concerns and must be within accep-
table bounds of the project owner. This means that
targets set at the portfolio and program level need
to be regularly discussed throughout the project
network and hierarchy to ensure flexibility for
appropriate changes at the project, program, and
portfolio levels and, when appropriate, the inte-
gration of new targets and determination of
boundary limits for the organization. This needs
to be managed at the portfolio, program, and pro-
ject interface and could represent new opportu-
nities rather than risk.
Although projects are not viewed as creating
benefits, projects engage in the process of shap-
ing benefits through interaction with the plurality
of stakeholders at the project, program, and port-
folio level and the broader SD agenda as guided
by SD standards. See Figure 22.4. SD objectives
help projects to take a longer-term view of the
impact of project outputs as part of a life-cycle
orientation. This shaping process occurs through-
out each phase of the project and feeds into the
organizational project network of programs and
portfolios concerning value creation and benefits
realization.
Capabilities
Successful integration of SD in individual
projects and throughout the hierarchy and
network of projects through OPM requires new
 OPM and Sustainable Development 337

SD Benefits Co Creation

Portfolio Management Project long-term investment perspective/SD outcomes/benefits

SD Benefits
Program Management Definition Delivery Closure Realization

Project Management Project life cycle

Project context

stakeholders
stakeholders Benefits Benefits
shaping shaping
Value Project
Project Project Project
creation Delivery SD Benefits
Initiation Planning Execution
concerns Close out Realization

Benefits Benefits Benefits

shaping shaping shaping
stakeholders stakeholders

INVESTMENT LIFECYCLE/BUSINESS CASE

Figure 22.4. SD benefits cocreation process. Adapted from Keeys & Huemann, 2017.

capabilities on the part of the project manager,
program manager, portfolio manager, and spon-
sor. Each has a role in ensuring that SD principles
are integrated in projects and that value creation
and benefits realization are maximized for broad
SD impact as a combined goal of SD and OPM.
While they are not necessarily experts on the
transdisciplinary content of SD, their understand-
ing of SD content and process orientation will
have an important impact on how SD issues are
considered in projects. This understanding will be
influenced by how the corporate organization
views SD and how it is captured in the strategy
and business objectives of the organization.
Companies often have difficulty integrating SD
in activities, processes, and operations because
SD is not integrated into core business strategy
and is handled as philanthropic or parallel to core
strategic processes. Aligning and integrating SD
with OPM will help project, program, and portfo-
lio managers to have an understanding of corporate
intentions, which can often be misunderstood at the
various levels of the organization without a clear
strategy (Linneleucke, Russell, & Griffiths, 2009).
The project sponsor will play a critical role
in spanning project, business strategy, and the
broader SD agenda to influence project outcomes,
value creation, and benefits in relation to the SD
OPM integration. Benefits realization provides
a focus for management of project interface at the
program and portfolio levels. Due to the context-
based definition of SD, project, program, and port-
folio managers will need to be sensitive to the
project context and the need to contextualize strat-
egy. This means that project managers must be
able to define strategy for benefits shaping at the
project level, which is viewed as contrary to the
more considered operational or execution role of
project managers. Project managers do not always
participate in project initiation decisions and there-
fore are not often in a position to formulate project
strategy at project start but will need to be able to
adapt and have a longer-term view to be able to
shape benefits throughout the project life cycle.
As the project manager will need to make sense
of corporate and business aims for benefits realiza-
tion at the project level, program and portfolio
managers will need to dynamically manage pro-
grams and portfolios to learn from the integration
of knowledge from the project as a smaller

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 338 Lynn A. Keeys and Martina Huemann
system (Koskinen, 2012). Project, program, and
portfolio managers will also need to develop
the ability to apply inclusive stakeholder manage-
ment as an important learning and cocreation
dimension of SD in OPM for value and benefits
creation. This area is covered in the section
Stakeholder Management and Engagement.
The issue of scheduling and sequencing of
projects needs to be managed at the program and
portfolio level and is linked to benefits shaping at
the project level. Robert et al. (2002) propose
flexible platforms (which are referred to here as
programs and portfolios) to create investments
that provide the basis for building future value
in SD. The actual scheduling and sequencing
of projects is an important function of portfolio
management. However, this issue also can occur
at the project level in regards to how benefits are
scheduled and sequenced in terms of targets and
benefits shaping with stakeholders. Capability
needs to exist throughout the project hierarchy
and network to manage scheduling and sequen-
cing of benefits.
Management of budget or financial resources
would appear to be a capability already
addressed in the normal business of PPPM.
However, the holistic consideration of complex-
ity through the three-dimensional lens of the SD
economic, ecological, and social pillars can
reveal the true cost of individual and network
of project activities, as it uncovers hidden risk
as well as opportunities. Taking a life cycle
approach to a transportation project would con-
sider many of the downstream costs related to
operation and impact on the SD system not con-
sidered otherwise and should be factored into
PPPM decisions.
Risks and Opportunities
The Rapid Rail Transportation Project (pseudonym)
had 22 targets for socio economic development,
along with environmental sustainability. SD
approaches in the project had cost, management
and risk implications which needed to be considered
at project initiation involving the initial bid and
throughout the project and product lifecycle. These
were included on the standing risk register.
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According to the project manager, socio economic
development was not a normal criterion in commer-
cial projects and, as part of the adjudication criteria
for the public private partnership, it had the potential
to be a huge financial disaster. The project was taking
place in a high skills-deficit context. At the same
time, the project created opportunities to maximize
local content and employment.
(Keeys, 2014)
Risk is often viewed as an approach to SD at the
project level to ensure achievement of project
success as defined by the key stakeholders.
However, SD also brings to the foreground the
true costs of project and organizational activities
regarding the SD system and different stakeholders
and opportunities for innovation, value creation,
and benefits realization as a result of identifying
risks in the project context. Risks can be process
risks or include the risks posed by the content or
outcome of the project deliverable. Or, risk can
indicate a disbenefit to a group of stakeholders as
well as opportunities for new value creation and
benefits. However, risks and opportunities need to
be identified at the organizational level and the
interface with projects, programs, and portfolios
need to be managed. In regard to considering SD
in managing risks, some principles have been sug-
gested (Huemann and Ringhofer, 2016), including
for project management:
• Explicitly considering economic, social, and
ecologic risks
• Balancing how much risk a project needs to
reduce and how much a project can explicitly
take and manage, as the reduction of risk might
also reduce the value of the project result/outcome
(Murray-Webster & Pellegrinelli, 2010)
• Identifying and managing risks iteratively,
not only the project risks but also those risks
that may arise during the project or after the
completion of the project for project
stakeholders
• Application of a multimethods approach, which
not only is based on quantitative estimations, but
also on qualitative methods including, for exam-
ple, systemic constellations (Huemann et al.,
2016; Kopp, 2016). By this multiperspective
a more comprehensive understanding can be

achieved, and the complexity that is there will
become more visible to the project manager and
the team.
Learning Integration
The consortium partners came to the Rapid Rail
Transportation Project (pseudonym) with different
notions of corporate sustainability and SD, without
SD integrated into core business strategy. Each
member had to adapt to the project context, where
the owner had an integrated and holistic approach
involving all three SD dimensions and with the con-
cerns of stakeholders. By project end, one of the civil
works partners had formalized the integration of SD
in its corporate strategy using the project as a model.
According to the company’s bid leader, “You need
project experience that feeds corporate policy and
vice versa; it goes both ways.”
(Keeys, 2014)
SD is context-based as macro-issues need to be
interpreted at the microlevel. As the system is in
continual flux and issues are transdisciplinary, orga-
nizational strategy needs to adjust to the project
context. The project context makes it difficult to
track the realization of organization SD aims in
projects without translating the organizational
aims to the project context. The project has
a social reality, where the project participants
negotiate and construct SD understandings with
other actors, source expertise and knowledge essen-
tial to identify SD concerns, determine value and
benefits, and make accommodations regarding, con-
straints, risks, and opportunities. This constitutes
elements of a contextualization process. The SD
learning, which results from this interaction
between the project and actors in its context, needs
to be integrated into the larger parent organization
network of projects, programs, portfolios, or net-
work of systems, as per Koskinen (2012), as an
iterative two-way process, so adjustments can be
made. Learning is important for enabling emer-
gence and realignment of organizational strategy
in relation to the individual project and the organi-
zational network of projects, programs, and portfo-
lios. Learning integration requires an organizational
strategy for change that includes the design of
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available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/9781316662243.028
OPM and Sustainable Development 339
appropriate project management and project pro-
cesses and structures throughout the OPM hierar-
chy to support regular assessment of project
learning concerning SD and benefits and adjust-
ments throughout the organizational project
hierarchy.
Summary
This chapter has addressed the integration of SD
for “shared” and “sustainable” value, and benefits
creation as a dimension of OPM that goes beyond
traditional ideas of sustainable competitive
advantage and business sustainability. SD is
a holistic concept, built on the interrelated and
interdependent economic, ecological, and social
dimensions that illuminate the complexity of the
world system where all social systems, organiza-
tions, and projects, operate. SD is relevant and an
essential aspect of the strategy of organizations
and projects that organizations create to bring
about strategic change, value creation, innovation,
and growth. The SD concept has been discussed in
terms of distinguishing the management paradigm
or process from the SD content. OPM has been
presented in terms of the coherent management of
the network of projects with the aim to contribute
to an organization’s strategic intent and business
objectives. The goals of SD and OPM are poten-
tially aligned and mutually reinforcing regarding
the maximizing of benefits for a broad group of
stakeholders as important to sustainable develop-
ment. This means SD at the organization and pro-
ject level creates benefits for the particular
organization while contributing to the sustainable
world goal of meeting the needs of current gen-
erations without jeopardizing the well-being of
future generations, in balance with the well-
being of nature. The successful integration of SD
for sustainable OPM requires dynamic manage-
ment related to strategy at the organization and
project level, enabling alignment and flexibility
for learning, adaptation, emergence, transforma-
tion, and realignment of approaches involving SD
actors or stakeholders. A framework, SD OPM
Benefits Keystone, has been presented as an
approach for appreciating the issues related to
 340 Lynn A. Keeys and Martina Huemann
integrating SD throughout the OPM structure.
These dimensions have been presented in terms
of strategy, structure, stakeholders, process,
capabilities, risks and opportunities, and learning
integration. Case examples have been presented
which help to illuminate the dimensions within the
discussion. The framework has been presented,
based on conceptual and empirical research,
grounded in the literature on project management,
strategic management, and SD and sustainability.
The framework has been presented as a guide to
issues of process and management regarding
the individual project and relationship to the hier-
archy of projects in the OPM structure within the
governance, business objectives, and strategy con-
text of the organization.
Conclusions: Investigating the Actuality
of SD and OPM
The integration and alignment of SD in organiza-
tions from an OPM perspective offers a viable
approach to manage the interface between SD by
project and SD at the corporate level. This is
a relatively new perspective and supports a robust
approach to achieving total integration of SD in
organizations and projects. The focus on maximized
value creation and benefits realization from the per-
spective of the broad group of stakeholders envi-
sioned by the SD definition provides viable avenues
for more robust SD by and in projects and integra-
tion of SD at the core of organization activities.
This is the fulfillment of the SD mainstreaming
objective – SD management paradigm. Benefits
realization is a fairly new and less researched area
of project management but is at the heart of project
success. Issues of how value is determined and
benefits identified, regarding the world SD system,
involving social and environmental systems, are at
the heart of the debate on SD and underscored by
philosophical perspectives on the state of the
system. From a system perspective, managing the
interface between the project as a smaller and
faster cycle of innovation with the larger and slower
parent organization will enhance opportunities
for positive change and continued adaptation and
innovation toward ongoing SD by projects,
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programs, and portfolios. This will contribute
toward a sustainable world goal where well-being
is a broadly realized benefit.
Importantly, the framework does not take the
traditional tools or iron triangle approach to project
management and to SD. The framework focuses on
actual issues related to the realization of benefits as
encountered by the project as a social system and
thus prioritizes the actuality of what happens in the
project context, which merges the parent organiza-
tion environment with the micro SD context where
projects operate. This is important because general
SD standards exist, tools for environmental SD and
related concerns have been developed, and indus-
tries and governments have instituted voluntary
and compulsory standards and guidelines. Yet,
organizations and projects continue to confront
issues that impede robust integration of SD as
a new management paradigm. In research and
practice, SD by and in projects is largely viewed
in isolation of the parent organization’s SD
concerns or lack thereof. The contextual issues
presented by the framework speak to the creation
of a foundation where tools related to content-
specific SD can be supported and regularly con-
sidered, accounted for, and used from project
initiation to project delivery and in programs and
portfolios. This foundation supports cocreation
with other SD actors, which is needed to achieve
on a continual basis the sustainability goal.
The intended result is benefits that meet the
goal of flourishing organizations within
a continuing sustainable world for present and
future generations.
A number of dimensions have been identified
as related to the central SD–OPM focus on
benefits realization that provides new areas for
research. First, dynamic management of systemic
SD in OPM. This will involve multilevel research
that looks at how the establishment of SD
objectives as integrated in organizational objec-
tives creates alignment in the hierarchy of
projects. Second, how PPPM and project pro-
cesses and project structures are designed to
enable planned emergence and even entrepre-
neurial approaches to addressing SD concerns.
Third, stakeholder management perspective and
stakeholder engagement approaches at portfolio,

program, and project level. Fourth, how OPM
enables the employment of progressive and
flexible platforms for increasing SD at the orga-
nizational level through the use of the hierarchy
and network of projects. These are only a few
illustrative areas for further research. Applying
the SD–OPM benefits framework to different
industries, organizations, project orientation
(internal or external), perspective (owner or
contractor), and project contexts will provide
further knowledge and insight and contribute to
developing models for sustainable OPM as
enhancing and broadening SD benefits created
by organizations and projects. As SD is
a system issue, applying a complex systems man-
agement lens to research will reveal the dynamic
nature of OPM and SD and how the integration
of the two produces benefits beyond the combin-
ing of two singular concepts. Sustainable compe-
titive advantage and sustainable business can
take on new meaning when sustainable develop-
ment is accepted as the new management
paradigm.
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Annex Illustrative General
Sustainable Development
Standards or Guidelines1
1. Global Reporting Initiative. www.globalreport
ing.org/
2. Integrated Reporting. http://integratedreporting
.org/when-advocate-for-global-adoption/
3. International Standards Organization (ISO)
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1
Note: this list does not include standards that exist for
individual industries, resources, crops, or products.
 CHAPTER
23
The Marketing of Organizational
Project Management
RODNEY TURNER and LAURENCE LECOEUVRE
Introduction
In this chapter, we describe project marketing as done
by the organizations involved in the management of
projects. In Chapter 6, Rodney Turner and
Ralf Müller introduced three types of organizations
involved in the management of projects: the project,
the contractor who does the work, and the investor
who initiates the project, owns the project output, and
receives the benefit. All three organizations need to
market their project-related products and services
to other projects, to other organizations, and to
a cacophony of stakeholders.
Within the project marketing literature there has
been a discussion about whether project management
is part of project marketing or project marketing is
part of project management. In fact, these two things
have a different focus. Project marketing as part of
project management is marketing by the project to
engage with its stakeholders. Stakeholder engage-
ment is part of project management, and the project
needs to market with the stakeholders to engage with
them. Project management as part of project market-
ing is contractors doing marketing to win new work.
In fact, it is not really that project management is part
of project marketing, but both are part of project
portfolio management. As part of managing its pro-
ject portfolio, the contractor does marketing to win
new business. If it is successful, then a project arises
as a result of the project marketing. Project marketing
results in the project and continues after the project is
finished. This discussion focuses on marketing by the
project and the contractor. We also introduce market-
ing by the investor.
In this chapter, we show how principles of mar-
keting can be applied to marketing by the project to
engage with stakeholders, marketing by the con-
tractor to win new business, and marketing by the
344
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investor to win support from a range of stake-
holders for the new investment they are making.
One of the nine schools introduced by Turner,
Huemann, Anbari and Bredillet (2012) was the
marketing school. They suggested that project
marketing is a recent addition to the project man-
agement anthology and an area for new research.
Through this chapter, we aim to point to project
marketing as a new area for consideration in the
field of organizational project management.
Organizations Involved in the
Management of Projects
In Chapter 11, Rodney Turner and Ralf Müller sug-
gest that there are three organizations involved in
the management of projects (see Figure 23.1):
1. The investor: This is a permanent organization
that initiates the project. It makes an investment
to deliver some change which will be operated
to deliver benefit to repay the investment.
The change is often a physical asset but may
be a new product, a computer system, or a new
organizational structure.
2. The project: This is a temporary organization
through which the investor makes the invest-
ment. The investor creates the project and
assigns resources in the form of money, people,
and materials, to deliver the change.
3. The contractor: This is a permanent organiza-
tion that undertakes the work of the project.
The investor usually does not have the compe-
tencies to undertake the project. Its business is
in the operation of the project’s output, not in
doing the work of the project. It therefore draws
on the services of a contractor to provide the
people to do the work.
 The Marketing of Organizational Project Management
Investor:
permanent organization,
project not core business
Parent- Client-
child contractor
Projects & Contractor:
programs: Resources permanent
provided-
temporary consumed organization,
organization projects
core business
Figure 23.1. Three organizations involved in the
management of projects After Winch, 2014
All three of these organizations need to undertake
marketing. There are many definitions of marketing.
The American Marketing Association (2014)
describes marketing as a process for creating, com-
municating, delivering, and exchanging offerings
that have value for customers, clients, partners,
and society at large. This comes closest to what
we will discuss here.
1. The investor is making an offering, the
change, which it expects will be of value to
partners, financiers, customers, suppliers, and
society at large. It needs to win the support of
these various parties for the change that is
being introduced by convincing them that the
change will provide them with benefit.
The main concern here is to create the right
narrative that enables people to see the invest-
ment in a positive light.
2. The project is also making an offering, the
change again. It needs to win the support of
various stakeholders, sponsors, financiers, con-
tractors, operators, customers, and the general
public to support the work of the project and to
accept the change once it is implemented.
However, now the focus is on convincing the
stakeholders that the project, and its output and
outcome, will provide them with a valuable
service that compensates them for the value
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345
they place on the input they will make to the
project.
3. The contractor is offering a completely
different service. It is offering its competence
to do the work of the project and thereby
provide the investor with value.
Marketing is not about providing products or
services but is about providing benefits to meet the
changing needs of customers (Kotler & Lane,
2008). Project participants need to identify, antici-
pate, and satisfy customer requirements (Dalcher,
2014), and to satisfy their customers’ needs through
a process of exchange. However, there is a very low
appreciation of the importance of project marketing
among project practitioners. In this chapter, we
describe the results of research we have done into
marketing by the three organizations.
Marketing of the Project: Marketing
by the Investor
The investor initiates the project to make an invest-
ment. The investment is a change the investor
undertakes to create a new asset, which will be
operated to provide benefit. The asset is operated
to generate the revenue that repays the cost of build-
ing the asset. The asset is usually decommissioned
at the end of its life. The investor usually owns the
new asset for its life and operates it to receive the
benefit to repay the investment. However, there are
other variations. In particular, the original investor
may sell the new asset at the end of the project to
a new investor, who we call the owner, and who will
operate the asset. The first investor then receives
their revenue and benefit for the sale, whereas the
owner receives their revenue and benefit from the
operation. In this case, the first investor does mar-
keting throughout the project, and the owner during
the operation stage.
Figure 23.2 illustrates that the project produces
three levels of results (Turner, 2014).
The output: This is the change that the project
introduces, usually in the form of a new asset.
It may be a physical asset, such as a new piece
of infrastructure (a road, bridge, or railway
 346 Rodney Turner and Laurence Lecoeuvre
Improved
performance
Concept
Benefit
Feasibility
Front-end Resources
Design
Figure 23.2. The project process and three levels of project results.
line), a new production process, a new product,
or a computer system. Or it may be something
more abstract such as a new design, a new
organization structure, or trained managers.
Or it may be an event such as a sporting or
cultural event.
The outcome: The output is not produced for its own
sake. The investor wants new competencies to
do something better, and the operation of the
asset provides those competencies. The new
competencies are known as the outcome.
The outcome provides the revenue stream from
which the initial benefit is obtained.
The goals: With time, the operation of the outcome
will enable the investor to achieve higher level
strategic goals, which will lead to further perfor-
mance improvement.
To illustrate this model we use two simple
examples:
(a) A company thinks that if it can improve its
marketing, it can improve its profits.
It believes that a customer requirements man-
agement computer system will help it improve
its marketing. The project output is the custo-
mer requirements management system, the
outcome is improved marketing, and the goal
is improved profits. The revenue and benefit
will come from greater sales and improved
profits.
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Exploitation
Goals
Operation Outcomes
Close-out
Project Outputs
Execution
(b) The Chinese government wanted increased
economic development on the north side of
the Yangtze River near Shanghai. Shanghai
is the most economically developed part of
mainland China, but the area on the north
side of the river was much less developed.
The reason was transport across the river was
poor, so people would not build their factories
on the north side of the river. If they did, it
would be difficult to get their products to
Shanghai to be shipped. So the government
built a bridge across the river to improve trans-
port. The project output was the bridge; the
outcome was better traffic flows; and the goal
was economic development on the north side
of the river. The initial revenue stream was
from tolls on the bridge, which provided
some benefit. But the longer-term goal and
performance improvement came from eco-
nomic development on the north side of the
river.
Figure 23.2 also shows an expanded project
process. There are five steps:
1 Concept: Somebody has an idea that a change
can be made that will provide benefit.
2 Feasibility: The technical and financial feasibil-
ity of the change is explored.
3 Front-end design: Initial design is done to prove
the investment: At the end of front-end design
 The Marketing of Organizational Project Management 347

Table 23.1 Stakeholders in the Investment, and Their persuading the investor and financiers to provide
First Engagement the necessary money and other resources to do
Stage of Their First the project, and making sure the flow of money
Stakeholders Engagement and resources continues throughout the project.
Sponsor Concept The sponsor needs to be persuaded that the pro-
ject is technically feasible and that the revenues
Investor Concept
will justify the cost. Once engaged, the sponsor
Financier Feasibility
becomes primarily responsible for marketing
Owner (Second investor) Feasibility the investment. In the case of the customer
Operators/users Feasibility requirements management system, the sponsor
Consumers Commissioning is a senior manager from the marketing depart-
Project Manager Feasibility Concept ment; in the case of the bridge it is somebody
Front-end design Feasibility from the economics department in central
Detail design Front-end design government.
Execution Front-end design
Investor: The investor is going to make the invest-
Commissioning Front-end design
ment, provide the money to deliver the project’s
Contractors Feasibility Concept
output (new asset), and they will receive the
Front-end design Feasibility
Detail design Front-end design profit from the operation of the asset. Usually
Execution Front-end design the investor will be the owner of the asset during
Commissioning Front-end design its operation and will receive the revenue from
Public Feasibility the sale of the outcome. But we said earlier that
Politicians Concept the initial investor may sell the output at the end
of the project to a new owner. The initial investor
then receives their profit from the sale price.
the execution of the project and construction of The new owner receives the revenue from
the asset (project output) will be sanctioned. the operation of the outcome. In the case of the
4 Execution: The detail design and construction of customer requirements management system, the
the new asset is performed. investor is the company’s board. The primary
5 Commissioning: The new asset is brought into investor is the Finance Director, but the primary
operation. owner is the Marketing Director. In the case
of the bridge, the investor is the national
Rodney Turner and Roxanne Zolin (2012) suggest government, but the owner is the provincial
that there are several stakeholders involved in government. The sponsor needs to persuade the
a project. Table 23.1 shows the ones we consider investor during the concept stage to fund the
here. These stakeholders need to be engaged in the feasibility study.
project at different stages of the project process, as Financiers: Often the investor will have access to
shown in Table 23.1. sufficient funds to pay for the investment, but
Sponsor: The initial idea for the project may come sometimes they will need to get extra funding
from a more junior person in the user depart- from external financiers. The financiers need to
ment. But it is necessary to identify a senior be engaged during the feasibility study. They
person to act as the primary ambassador for the need to be persuaded, by the sponsor and inves-
investment. This person needs to be engaged tor, that the project is technically and financially
during the concept stage. Rodney Turner and feasible. They will provide funds for all the sub-
Ralf Müller discuss the role of the sponsor in sequent stages.
Chapter 11. Their role includes being the pri- Owner: If the initial investor is going to sell the
mary ambassador, selling the project to many project’s output at the end of the project,
of the other stakeholders listed below, they need to market it to potential owners.

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 348 Rodney Turner and Laurence Lecoeuvre
The owners might be engaged quite late in the
process, but they may be engaged as early as the
feasibility study to see what interest there is.
Operators/users: These are the people who will
operate the output to achieve the outcome.
They can make failure a self-fulfilling prophecy.
If they say it won’t work, it won’t work. They
may be engaged as early as feasibility to give
guidance on designing an asset that is operable
and be persuaded that it is useful and feasible.
In the case of the customer requirement manage-
ment system, there will be people in the compu-
ter department who actually maintain the
system. In the case of the bridge, the operators
are the management team of the bridge.
Consumers: These are the people who will buy the
outcome and thereby provide the revenue that
provides the benefit. In the case of the customer
requirements management system, it is people
from the marketing department who use the sys-
tem to make better decisions. In the case of the
bridge, the primary users are the motorists. But
secondary users are people who build their fac-
tories on the north side of the river. In the actual
case, no marketing was done to either of these
groups initially, so there was little traffic on the
bridge, and few factories were built on the north
side of the river. The Chinese government realized
it was necessary to make individuals responsible
to marketing to both groups. This is a governance
issue, Chapter 6. Not only did they need the pro-
ject manager responsible for achieving the pro-
ject’s output, they needed a sponsor responsible
for achieving the outcome and a senior manager
responsible for achieving the goal.
Project Manager: The project manager needs to be
engaged. It is critical that he or she supports the
project. There may indeed be several project man-
agers. The project process is not one project. There
are usually at least three: feasibility; front-end
design; and execution. Even detail design and
construction may be separated, and there may be
a deputy who takes over commissioning.
Table 23.1 suggests the managers of the early
stages need to be engaged in the preceding stage,
but all the managers for execution (detail design,
construction, and commissioning) need to be
engaged during front-end design.
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Contractors: Similarly, with contractors. Part of the
feasibility of the project is that there are contractors
able to do it, and contractors can help with build-
ability during the design process. So they need to
be engaged before procurement actually starts.
The contractors also have to want to bid. They
need to be persuaded that the project is feasible,
and it will provide them with a reasonable profit.
The investor also has to persuade the contractor
that they are a client the contractor wants to work
with.
Public: The support of the public is required
throughout the entire process.
Politicians: Sometimes the concept for the project
will come from politicians. Rodney Turner inter-
viewed the road building authority in the
Netherlands, Rijkswaterstaat. They said often in
the Netherlands the initial suggestion comes from
politicians, and regardless they need to be engaged
at a very early stage in the planning process.
The concept stage can last for decades for a large
road scheme. One of the people Rodney inter-
viewed said his project had been mooted for fifty
years before work started. Politicians will be
engaged through that entire process. During that
time, we expect politicians will change and have
different political persuasions and views. It is
necessary to work with them continuously.
The Narrative
In marketing of the investment, storytelling is impor-
tant. In order to get someone to accept the investment
you want to make, you have to get them to give you
permission to do it. You need to influence them to
your way of thinking. In order to do that, you should
communicate with them, but communicating should
be storytelling with a purpose. The future is not
written; you must write the future. In order to do
that, you need to know two things:
1. The desired outcome: the future you want
2. The cause: the emotional plant that will make
other people want it too. Human beings are
emotional, not logical, so you need to find the
emotional plant that will make them want the
future you want. Ideally, they should want it,
not just accept it.
 The Marketing of Organizational Project Management
So you need to compose the story that will help you
achieve that. The story will consist of a vision,
anecdotes, and facts and figures.
There are two current projects in the United
Kingdom where the narrative is important: the
project with the wrong name and the expansion of
Heathrow Airport.
The project with the wrong name: This is the pro-
posed high speed line from London to
Birmingham to Manchester. It is called High
Speed 2 or HS2. High Speed 1 was originally
called the Channel Tunnel Rail Link, CTRL, the
line from St Pancras Station to the Channel
Tunnel. HS2 is a new line from London Euston
to Birmingham New Street and then on to
Manchester Piccadilly. It will chew up virgin
countryside. Because it is called HS2, people
assume the purpose is to get to Birmingham ten
minutes quicker. People say, probably rightly,
that there is no need to get to Birmingham ten
minutes quicker. There is Wi-Fi on the trains,
you can spend the time doing emails. Anyway,
who wants to get to Birmingham ten minutes
quicker? Some people think it is not a very nice
place. Perhaps, you want to get back from
Birmingham ten minutes quicker. But the story
is we don’t need to chew up virgin countryside
and destroy peoples’ homes to get to
Birmingham ten minutes quicker.
However, the purpose is not to get to
Birmingham ten minutes more quickly.
The West Coast Mainline is at capacity. More
trains are needed for the short distances, such as
to Watford, and the medium distances such as to
Rugby, and for freight. But there is no more
space on the lines. Two more tracks are needed
in each direction, but those tracks can’t be put
alongside the existing tracks. A new line is
required, and if you are building a new line you
might as well make it high speed. So the name
needs to be “more trains to Rugby and Watford,”
and the people of Rugby and Watford need to be
brought on board so they are actively campaign-
ing for increased capacity. If they were shouting
from the rooftops that they want it, it would
make the case for the project stronger. People
need to be actively saying they want it.
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349
Expansion of Heathrow Airport: The story is that
there are two options: 1. maintain the current
size of the airport or 2. build a third runway –
and if a third runway is built it will lead to more
noise, which will damage people’s health. But
those are not the two options. The two options
are to: 1. expand the airport or 2. have it decay.
The airport employs 500,000 people, and con-
tributes 1 million jobs to the local community.
If it is not expanded, it will decay and, with
time, those jobs will be lost. So the local com-
munity has the choice between jobs with noise
or no jobs with no noise. But in fact the expan-
sion will in the first instance lead to less noise
as the same number of planes is spread over
three runways and not two. The popular per-
ception is that the number of planes using the
airport will jump by 50% overnight, but of
course it will only grow slowly, and during
that time aircraft technology may improve
so the noise drops. So the popular story is that
the choice is between the status quo and expan-
sion, and expansion will lead to more noise.
The alternative story is the choice is between
expansion and decay. Decay means fewer jobs.
Expansion means less noise because the same
number of planes will be spread over more
runways. The story is critically important.
Marketing by the project: Marketing
by the Project
Marketing by the project is also about engaging
with stakeholders (Eskerod, 2013; Huemann,
Eskerod, & Ringhofer, 2016; Turner, 2014), but
with a different focus. Figure 23.3 shows the project
management process adapted from the Project
Management Institute (PMI, 2013). Marketing to
the stakeholders only occurs during the execution
phase of the project, from initiation to closure
(whether that is a project at the feasibility, front-
end design, or execution stage of the project
process). A stakeholder is anybody who has an
interest in any of the steps of the project or invest-
ment cycle, or as illustrated in the boxes in
Figure 23.2: concept, feasibility, front-end design,
detail design, construction, commissioning,
 350 Rodney Turner and Laurence Lecoeuvre

Controlling
Processes

Initiating Planning Executing Closing

processes Processes processes processes

Marketing
processes

Figure 23.3. The project management process. Adapted from PMI, 2013.

Organization Conflict
awareness management

Monitor
Identify internal &
stakeholders external
changes

Develop
Identify Predict the Communicate Monitor
a strategy Successful
stakeholder response of with stakeholder
for each project
interests stakeholders stakeholders satisfaction
stakeholder

Building
Developing Teamwork &
Organization bonds Change
Empathy others collaboration
awareness Inspirational catalyst
Service Influence
Leadership

Figure 23.4. A stakeholder engagement process.

operation, resources, output, outcome, goal, benefit,
and performance improvement. Figure 23.4 shows
a stakeholder engagement process. The steps are:
1. identify potential stakeholders and their
interests
2. predict their responses
3. develop a communication strategy for each
stakeholder
4. communicate with the stakeholders
5. monitor their responses
6. and hopefully that leads to a successful project
7. but if there are changes it may require you to
revisit your communication strategy

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 The Marketing of Organizational Project Management 351

Marketing occurs at all the steps. At steps 1 and 2, Table 23.2 A Model for Emotional Intelligence
we identify the potential customers for the project Element Associated Competencies
and segment the market (Kotler & Lane, 2008).
Different customers will have different needs and Self-awareness Emotional self-awareness
Accurate self-assessment
respond in different ways. At steps 3 and 4, we Self-confidence
develop and implement the advertising campaign.
Self-management Emotional self-control
At steps 5, 6, and 7, we monitor what effects it is Transparency
having and make the necessary adjustments. Adaptability
Rodney Turner and Laurence Lecoeuvre (2015) Achievement
invoke the 4Ps of marketing (Kotler & Lane, 2008): Initiative
Optimism
Product: The project organization needs to under- Social awareness Empathy
stand the benefit that stakeholders perceive they Organizational awareness
will obtain from the project and how they will Service
perceive the value of that benefit. People do not Relationship management Building bonds
buy products, they buy benefits, and it is the Teamwork and collaboration
same with projects. The project manager needs Inspirational leadership
Influence
to understand what benefit each of the stake-
Developing others
holders will perceive from the project, and it Change catalyst
must be from the stakeholders’ perspectives. Conflict management
This requires an element of emotional intelli-
gence (Turner, 2014), which we will return to
shortly.
Price: The stakeholders perceive the commitment
Self-awareness
they make to the project as a price they pay. (3 competencies)
From their perspective, the benefit they think
they will receive must justify the price.
The commitment can take many forms, includ-
ing time and resource, emotional support, Social
political support, and others. Not only must Self-management awareness
(6 competencies) (3 competencies)
the project manager be able to understand the
benefit the stakeholders perceive they will
obtain from the project, but the project
manager must also know the value the stake- Relationship
holders place on the commitment they have management
to make and whether it is justified by the (7 competencies)
perceived benefit.
Promotion: So the project manager needs to Figure 23.5. A model for emotional intelligence.
develop a communication plan, tailored to each Adapted from Goleman, Boyatzis, & McKee, 2002.
stakeholder (market segmentation). The project
manager needs to persuade the stakeholders to We have suggested that marketing to the stake-
make the desired commitment and persuade holders requires emotional intelligence (Turner,
them that the value they perceive from the ben- 2014). Figure 23.5 shows a model for emotional
efit is worth the value they place on the commit- intelligence (adapted from Goleman, Boyatzis, &
ment they will make. McKee, 2000). There are four major elements, with
Place of sale: The project manager needs to com- nineteen associated competencies, Table 23.2. First,
municate with the stakeholders where the project the project manager needs to be aware of his or her
impacts on their lives. emotional responses to situations, and to be able to

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 352 Rodney Turner and Laurence Lecoeuvre
manage the responses. If something is making him
or her angry, be aware of that, don’t react, but
manage the situation. Then he or she needs to be
aware of the emotional responses in others. Others
may respond differently to the project manager.
If the project manager can be aware of and manage
his or her emotional responses and be aware of the
emotional responses of others, he or she will be
better able to build relationships with the others.
The objective is to build relationships with and
engage the stakeholders. Figure 23.4 also shows
how the ten competencies associated with social
awareness and relationship management contribute
to the stakeholder engagement process.
There are two subsidiary competencies of social
awareness we would like to focus on:
Empathy: This is the most important element
of emotional intelligence required by the pro-
ject manager. We said earlier that the project
manager must be able to see the project from
the stakeholders’ perspective; the project
manager needs to be able to understand what
benefit the stakeholders perceive from the
project and what value they place on their
contribution. The stakeholders need to think
that the value they place on the benefit from
the project is greater than the value they place
on their contribution. The project manager
needs to see that from the stakeholders’
perspective. Also, the project manager needs
to be aware of how the stakeholders are
responding emotionally.
Service: The project is providing a service to the
stakeholders, and the project manager needs to
be aware of that. The service-dominant logic of
marketing (Vargo & Lusch, 2004; Lusch,
Vargo, & O’Brien, 2007) suggests that if you
are providing a service, you should market with
people (building relationship) rather than mar-
ket to them, to collaborate with customers and
partners to co-create value for all parties. That
is the aim of stakeholder engagement. Further,
you try to overcome resistance by cocreating
networks and processes to create mutually ben-
eficial value and conversations and dialogue to
work together so that you can offer the stake-
holders a service they value. The service-
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dominant logic is management for stakeholders
rather than management of stakeholders
(Huemann et al., 2016).
Marketing for the Project: Marketing
by the Contractor
Contractors exist to undertake work on projects that
the client (investor) cannot do for themselves.
Contractors have knowledge, competencies, and
skills that clients do not have internally, and the
ability to use these to provide value to the client
gives them a competitive advantage. The contractor
provides these services to the client to enable the
investor to undertake its projects. The services-
dominant view of marketing (Lusch et al., 2007)
would therefore suggest that contractors exist to
integrate and transform their specialist competen-
cies into services that are demanded in the market
place and which can provide their customers with
value.
Marketing by the contractor necessarily takes
place at the project portfolio level (Turner &
Lecoeuvre, 2015). Project marketing researchers
suggest that while project management deals with
organizational and management issues, project mar-
keting deals with sales and marketing issues of
projects. They define a project strictly from the
marketing perspective, suggesting that a project is
a complex transaction covering a package of pro-
ducts, services, and works, specifically designed to
create capital assets that produce benefits for
a buyer over an extended period of time (Cova &
Salle, 2005). They link project marketing to the
management of projects (Morris, 1997), suggesting
it should start at the very early preproject phase.
However, Cova and Salle’s life cycle for project
marketing has just three phases, taking place before
the project starts:
1. independent of any project
2. pre-tender
3. tender preparation
During the “independent of any project” phase,
emerging projects are detected among the custo-
mers. The marketing approach here is defined as
 The Marketing of Organizational Project Management 353

Rel
Tru
Gwi

Pre-start

Com Col
Tru Post-project Project start Tra
Rel Gwi

Delivery

Col
Tra
Com

Figure 23.6. Four phases of project marketing. After Lecoeuvre and Deshayes, 2006.

anticipation. The next stage is the pre-tender stage
where project screening should take into considera-
tion project characteristics and strategic intent.
Once the project has been screened and require-
ments reviewed, we enter into the project develop-
ment phase. According to this school of thought, the
first goal of the project marketing process is to win
the contract. But project marketing is a continuous
process that occurs throughout the project portfolio,
during the realization and project follow-up phases
as well. The follow-up phase, which occurs after the
project has been delivered, is crucial since this
determines customer satisfaction and key account
development, and its success will reduce the dis-
continuity of project activities (Cova et al., 2002;
Lecoeuvre & Deshayes, 2006; Lecoeuvre,
Deshayes, & Tikkanen, 2009). For this reason,
Lecoeuvre and Deshayes (2006) added a fourth
phase to the project marketing process, the postpro-
ject phase, Figure 23.6, giving four phases of project
marketing:
1. Preproject marketing: The project does not
exist yet, but the supplier anticipates the custo-
mer’s requirements, develops themes for the
potential bid (Bernink & Turner, 1995), and
maintains the relationship with the client.
2. Marketing at the start of the project:
The supplier starts with coconstruction of
rules beside and within the network of influen-
tial relationships.
3. Ongoing project marketing: The supplier, cli-
ent, and subcontractors proceed with renegotia-
tion, modifications, follow-up, and meetings
following one another with constant relation-
ship exchanges until the end of the project.
4. Creating the conditions for future projects:
The supplier maintains the relationship with
the client, through logistics support and “sleep-
ing relationships” which enables it to manage
discontinuity in project business and prepare
for future projects.
Project marketing is part of portfolio manage-
ment, trying to secure a continuous stream of pro-
jects into the project portfolio. As the project
marketing literature suggests, project marketing is
about marketing and sales, not of projects, but of the
competencies that the contractor has that can pro-
vide the customer with value (Lusch et al., 2007).
Those competencies will be provided to the custo-
mer through a project, but the focus of the market-
ing should be the competencies and the value that
they can provide the customer.

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 354 Rodney Turner and Laurence Lecoeuvre

Turner, Lecoeuvre, Er, and Sankaran (2016) con-
firmed these four phases. The contractor should be
constantly scanning for new opportunities, indepen-
dent of any project, and aim to ensure they are on the
tender list for new opportunities. The tender is the
process by which the actual sale is made and is
related to a specific project, so it can be said that
project marketing results in a project. It is during the
project that the actual service is provided, but as
Lusch et al. (2007 p. 7) suggest, “There is no benefit
until the offering is used.” It is the customer who
realizes the value after the project. It is also after the
project that the relationship returns to the portfolio
level, independent of any project.
Lecoeuvre and Deshayes (2006) suggest that
there are six elements of project marketing, which
are applied through the project marketing process
(see Figure 23.6):
1. Relationship management (Rel)
2. Trust (Tru)
3. Collaboration (Col)
4. Communication (Com)
5. Training (Tra)
6. Going with (providing mentoring, coaching
and support) (Gwi)
Thus the focus is on marketing with the client
(Lusch et al., 2007), by collaborating with them to
produce and sustain value for the client.
The contractor collaborates with the client so that
it can draw upon resources that the contractor pro-
vides. As with marketing by the project, this helps in
the cocreation of networks and processes to create
mutually beneficial value and conversations and
dialogue to work together, so that the contractor
can offer the client a service it values. Turner et al.
(2016) demonstrated the importance of these six
enablers of cooperation in supporting the marketing
activity.
Turner and Lecoeuvre (2015) build on the work
of Bernink and Turner (1995) to identify three key
stakeholders who are the target of project marketing
(see Figure 23.7). This is a form of market segmen-
tation (Kotler & Lane, 2008):
The strategic decision makers: These are the people
who will ultimately decide to do the project and
determine which contractor will be awarded
the contract. These people are interested in the
project’s goal. The contractor’s board of direc-
tors should target these people, with the help of
the marketing department.
The operations managers: They are both the users
and the consumers. There may be one set of
operations managers who will operate the pro-
ject’s output (the users), and another set who will

Strategic
decision
makers

Confidence
Selling

Account
team
Competence Solution
Selling Selling
Technology Operations
managers managers

Figure 23.7. Three customers for the contractor’s account team. Adapted from Bernink & Turner, 1995.

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 The Marketing of Organizational Project Management
make use of the project’s outcome and obtain the
benefit (the consumers). These people are not
interested in the technology. The consumers
want the project’s outcome to satisfy their
requirements and provide them with adequate
benefit. The users want ease of operation.
It will usually be the role of the sales and market-
ing department to communicate with these peo-
ple, though the project manager may also be
involved. It is essential to make them comforta-
ble that the project’s outcome will satisfy their
requirements and provide them with the benefit
they want and that the output will be easy to
operate.
The technical managers: These are the people who
will judge the contractor’s technical solution and
will be able to determine whether the project’s
output will work to provide the outcome.
The contractor’s technical managers must com-
municate with these people to persuade them of
the contractor’s technical competence.
There are three similar groups of people in the
contractor’s account team (Turner et al., 2016): the
strategic managers, the marketing managers, and
the project and technical mangers. The strategic
managers tend to form the relationship with the
strategic decision makers above, the marketing
managers with the operations managers, and the
project and technical managers with the technical
managers. Their involvement also evolves through-
out the four phases of project marketing: the strate-
gic and marketing managers are involved during the
“independent of any project” phase; the marketing
and technical managers during the bid phase; the
technical managers are involved during project
execution; and all three are involved in the follow-
up phases.
Conclusions
As we have seen, there are three organizations
involved in the management of projects: the inves-
tor, who makes an investment that they expect will
provide them and other stakeholders with benefit;
the project through which the investor makes the
investment; and the contractor who provides the
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355
investor with competencies to undertake the work
of the project. All three of these organizations need
to market their project-related products and
services.
(a) The investor needs to win the support of stake-
holders for the investment, including the finan-
ciers who will provide the money, the
contractors who will do the work and consu-
mers who will buy the projects output and out-
come. Different stakeholders need to be
engaged at different stages of the investment
life cycle. In order to get stakeholders to buy
into the future you want, it is important to create
the correct narrative, which will stimulate the
emotional plant that will make the stakeholders
desire the future the investor wants.
(b) The project needs to engage with stake-
holders and win their support for the project,
by convincing them that the perceived bene-
fit of the project (product) justifies the input
they have to make (price). It is essential that
the project manager sees this balance from
the stakeholders’ perspective. The concept of
marketing for the stakeholders suggests that
the project manager and project team should
see themselves as providing a service to the
stakeholders, marketing with them and not
to them. They should try to overcome resis-
tance by cocreating networks and processes
to create mutually beneficial value and con-
versations and dialogue to work together, so
that they can offer the stakeholders a service
they value.
(c) The contractor’s aim is to win new business by
selling the services they can provide to the
investor. Marketing begins before the project,
continues throughout the project life cycle and
after project completion to maintain an
ongoing relationship with the project focused
on future projects. It is necessary to market to
three groups of people – the decision makers,
the operators, and the technical experts – who
engage with the project in different ways.
The contractor’s account team will consist of
strategic managers, marketing managers, and
technical managers marketing to the different
groups.
 356 Rodney Turner and Laurence Lecoeuvre
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 CHAPTER
24
Shared Space for Organizations
Enablers for Innovative Projects
KIM VAN OORSCHOT
Introduction
Many organizations execute a multitude of projects
simultaneously and managing such a portfolio of
new product development projects is critical to
new product success. Over the years, project man-
agement has been professionalized, leading to the
development of tools and structures for guiding
projects toward desired outcomes (March, 2006).
Further, portfolio management has become one of
the most important senior management functions
(Cooper, Edgett, & Kleinschmidt, 2001). Barczak,
Griffin, and Kahn (2009) found that only about 59
percent of newly commercialized products are
considered successful. This rate of success
remained largely unchanged between 1990 and
2004, even though the number of firms using formal
processes, methods, and techniques to improve
new product development increased from 54
percent to 69 percent during the same period. To
survive in a dynamic business environment,
organizations need projects that focus on exploita-
tion (reusing existing knowledge) and those that are
centered around exploration (delivering new knowl-
edge) (Damanpour, Walker, & Avellaneda, 2009;
Leonard-Barton, 1992; Walrave, van Oorschot, &
Romme, 2011), although the mix between these two
types of projects is dynamic. Sometimes more focus
on exploitation is required (Yadav, Prabhu, &
Chandy, 2007); sometimes attention must shift
to exploration (Lee & Makhija, 2009; Sidhu,
Volberda, & Commandeur, 2004). This dynamic
process of strategizing and organizing is an aspect
of what is referred to as organizational project man-
agement (Aubry, Hobbs, & Thuillier, 2007).
Organizational project management acknowledges
that strategy and structure are linked together in a
dynamic process. The organizational structure
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should follow its strategy. However, when the
strategy is dynamic, in the sense that the mix of
exploitation and exploration projects constantly
needs to be adapted to the business environment,
what does this mean for the structure?
Organizational structures typically increase demar-
cations between projects or departments. These
demarcations lead to learning silos that negatively
affect knowledge sharing across these silos
(Hobday, 2000; Sydow, Lindkvist, & DeFillippi,
2004). The central question is this chapter is
therefore: what structure can deal with strategic
changes and in turn changes in the product portfolio,
while breaking down learning silos between
departments and projects?
In urban design, a similar problem is found: when
large numbers of pedestrians and vehicles need to
interact, different lanes are built; traffic signs and
lights are used to manage the flow of traffic.
However, in recent years a new concept called
“shared space” has been introduced in urban areas
in The Netherlands, Denmark, Sweden, and the
United Kingdom. In such a shared space, demarca-
tions, rules, lanes, and signs are strongly reduced.
In the absence of rules, street users need to rely
on other signals. Communication and eye contact
become the norm, while the speed of motorized traf-
fic is reduced (Hamilton-Baillie, 2008; Moody &
Melia, 2014). As a result, shared space not only
increases safety, but it also increases the flow of
traffic (resulting in less delays).
In this chapter, an analogy is drawn between
demarcations and rules used in traffic and those
used in organizations that execute innovative
projects. Several “shared space” examples from a
project management context are discussed that have
similar effects as their counterparts in traffic. These
so-called enablers for organizational project
357
 358 Kim van Oorschot
management also remove demarcations (rules and
structures), thereby creating “space” in organiza-
tions that benefits knowledge sharing, creativity,
and innovation. This will help organizations to
dynamically balance their portfolio of exploitation
and exploration projects.
Dynamic Balance between Exploitation
and Exploration
Firm growth is associated with the capacity to
constantly renew the product portfolio (Aubry,
Hobbs, & Thuillier, 2007) at an ever-increasing
rate because product life cycles are becoming
shorter (Eling, Langerak, & Griffin, 2013).
Together with a continuous increase in product
complexity, this means that many industries are
facing a dynamic and competitive landscape in
which performance depends on the organizational
ability to change and innovate as well as achieve
returns on investments in these innovations
(Damanpour, Walker, & Avellaneda, 2009;
Leonard-Barton, 1992; Walrave, van Oorschot, &
Romme, 2011). As a result, many organizations
execute many projects simultaneously, and mana-
ging such a portfolio of new product development
projects is critical to new product success. In fact,
portfolio management has become one of the most
important strategic management functions (Cooper,
Edgett, & Kleinschmidt, 2001; Kaiser, El Arbi, &
Ahlemann, 2015). Consequently, new organiza-
tional forms appeared in the 1990s, such as the
project-based organization (Aubry, Hobbs, &
Thuillier, 2007; Hobday, 2000).
Compared with the functional and matrix
organization, this project-based organization is
better suited for managing increasing product com-
plexity, fast-changing markets, cross-functional
business expertise, customer-focused innovation,
and market and technological uncertainty
(Hobday, 2000). In the project-based organization,
the project is the primary unit for production orga-
nization, innovation, and competition (Hobday,
2000). This kind of organization is very appropriate
for the development of high-value, complex
industrial products and systems (Hobday, 1998).
These developments are often also referred to as
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exploration, which involves the pursuit and acquisi-
tion of new knowledge (March, 1991; Walrave, van
Oorschot, & Romme, 2011); creating adaptability
by developing new offerings (Benner & Tushman,
2003; Jansen, Van den Bosch, & Volberda, 2006).
However, as stated above, firms also need to
generate returns on their investments in these
new offerings. In addition, they need to invest in
low-risk activities to reliably generate returns. This
is also referred to as exploitation: exploiting current
offerings by incrementally improving existing knowl-
edge (March, 1991; Walrave, van Oorschot, &
Romme, 2011). This ambidextrous capability, i.e.,
finding the right balance between exploitation and
exploration, is one that many firms struggle with
(Helfat, et al. 2007).
A number of reasons why this balance is difficult
to find and maintain can be found in the literature.
Organizations that have shown strong performance
in exploitation over a long period may be reluctant
to change their exploitation activities that have
brought them stable success over the years. This is
also known as the ”success trap” (Levinthal &
March, 1993). Firms can stay caught in this trap
even when changes in the business environment
requires them to focus on more exploration
activities (March, 1991). The opposite (failure
trap) can also occur, although it is less common
(Levinthal & March, 1993). Exploration projects
often result in failure. These failures may increase
the search for even more novel ideas, which in
turn may trigger new failures. As such, exploration
may lead to even more exploration (Gupta,
Smith, & Shalley, 2006). It is argued that top
managers can get caught in these kinds of traps
because of myopic tendencies. These tendencies
limit managers’ ability to adapt strategy (i.e., to
modify the portfolio of projects in favor of more
exploitation or more exploration) to environmental
changes (Hannan & Freeman, 1984; Levinthal &
March, 1993; Tushman, Newman, & Romanelli,
2004). However, as Walrave, van Oorschot, and
Romme (2011) point out, myopia is likely to delay
a strategic adaptation, but it will not suppress a
strategic change. These authors further explain
that it is more plausible that the reluctance to change
is caused by the interplay between top management
and the board of directors (the owners of the firm).

The board of directors often demand short-term
results, which forces top management to direct
focus on exploitation activities. This holds especially
in times of environmental decline (Hendry & Kiel,
2004; Walrave, van Oorschot, & Romme, 2011;
Westphal & Fredrickson, 2001).
Nevertheless, even when top management and
the board of directors have managed to establish
a project portfolio that consists of a balance
between exploitation and exploration projects, it
is unlikely that this balance is stable over time.
That is, the right mix of projects depends on the
business environment of the firm, or the course of
the business cycle. For example, more attention
should be given to exploration in a recession
because business opportunities are relatively
scarce (Lee & Makhija, 2009; Sidhu, Volberda,
& Commandeur, 2004). On the other hand, in
an economic recovery, more attention should be
given to exploiting business opportunities (Yadav,
Prabhu, & Chandy, 2007). As such, changes in the
environment or business cycle require strategic
adaptations, which in turn call for rebalancing
the project portfolio.
This dynamic process of strategizing and
organizing is central to organizational project
management (Aubry, Hobbs, & Thuillier, 2007).
Organizational project management is a new sphere
of management where dynamic structures in the
firm are articulated as means to implement
corporate objectives through projects in order to
maximize value (Aubry, Hobbs, & Thuillier, 2007,
p. 332). Organizational project management does
not necessarily imply that all organizations should
be project-based; rather, it acknowledges that
strategy and structure are linked together in a
dynamic process. The organizational structure
should follow its strategy. However, when the strat-
egy is dynamic, in the sense that sometimes more
weight needs to be given to exploration, followed
by periods in which exploitation needs to be
prioritized, what does this mean for the structure?
The project-based organization is probably best for
exploration activities (large innovative and complex
projects), whereas the functional matrix fits exploi-
tation, routine production, engineering tasks,
and achieving economies of scale (Hobday, 2000).
Interestingly, both structures may possess the same
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Shared Space for Organizations 359
disadvantage: structures lead to learning silos.
In the functional matrix, demarcations between
departments (R&D, engineering, production, and
maintenance) may prevent learning across
departments. In the project-based organization,
demarcations between projects may prevent
cross-project learning (Hobday, 2000; Sydow,
Lindkvist, & DeFillippi, 2004). So what structure
can deal with strategic changes and in turn changes
in the product portfolio, while breaking down
learning silos between departments and projects?
The answer to this question may be literal: no
structure.
Shared Space
The problem of urban design is an interesting
context to find a structure that can deal with frequent
strategic changes that are required in dynamic
environments (like the upturns and downturns in
business cycles). In the past century, the introduc-
tion of motorized vehicles increased the volume
of these vehicles, causing the need to balance safety
and accessibility (Hamilton-Baillie, 2008). As a
result, streets became more and more regulated by
government – using rules, control systems, and
markings. Motorized traffic needed to be separated
from pedestrians and social activities. This segrega-
tion was intended to reduce the number of accidents.
In Figure 24.1, this intended effect of segregation
is depicted as a balancing feedback loop (B1).
This balancing loop indicates that government
tried to solve the problem of traffic volume by
segregation that was supposed to bring the system
back in balance. However, in recent years, an
unintended side effect of separation has been recog-
nized. The rules, signals, barriers and controls have
reduced the accessibility of roads for nonmotorized
traffic (Hamilton-Baillie, 2008). Streets become
less attractive for nonmotorized traffic and percep-
tions of safety declined. Pedestrians and cyclists
prefer to take the car for even short distances,
which only increases the volume of motorized
traffic, the likelihood of accidents, and even more
need to give space to cars. This unintended effect is
shown as a reinforcing feedback loop (R). This
reinforcing loop indicates that the segregation
 360 Kim van Oorschot

introduction of
motorized vehicles
+
volume of
motorized traffic +

– +
+ +
use of non-motorized need to balance safety remove characteristics
accidents
traffic and accessibility associated with ‘‘highway’’

R B B
+ + –
unintended effect – intended effect that shared space
that did happen did not happen solution

government regulation of streets need to segregate traffic

accessibility for rules, certainty,
through use of rules, control movement from pedestrian and
non-motorized traffic predictability
systems, markings social activities
– +
–
–
need to rely on cultural
average speed of signals and informal social
motorized traffic eye contact between protocols
– motorized and +
non-motorized traffic

Figure 24.1. Intended and unintended effect of segregation in traffic and the shared space solution.

solution may only make the problem of motorized
traffic volume worse.
To prevent this unintended side effect (the rein-
forcing loop) and to stimulate nonmotorized traffic,
a new concept has been introduced in urban design,
called “shared space.” Dutch traffic engineer Hans
Monderman introduced this concept in 1982. His
aim was to reduce accidents and congestion and to
increase the flow of traffic (Moody & Melia, 2014).
Shared space is “an approach to improving streets
and places where both pedestrians and vehicles are
present, with layouts related more to the pedestrian
scale and with features encouraging drivers to
assume priority having been reduced or removed”
(Kaparias et al., 2012, p. 297). Shared space pro-
motes a sense of vigilance and responsibility by
reducing demarcations and physical distinction
between the streets and pedestrian areas. On the
one hand, attractive features can be added to shared
space environments to provide a pleasurable area
that stimulates pedestrians to walk to their destina-
tions (Anvari, Bell, Sivakumar, & Ochieng, 2015).
On the other hand, features that are associated
with highways, such as road markings, traffic sig-
nals, and signs, can be removed. This affects the
relationship between people, places, and traffic
(Hamilton-Baillie, 2008). In the absence of rules,
and the predictability and certainty that traffic
demarcations used to provide, street users need to
rely on other signals. Communication and eye con-
tact become the norm, while the speed of traffic is
reduced. Alternatively, as Hamilton-Baillie (2008)
points out: “The less the manifestations of ‘the high-
way’ are evident, the more drivers rely on their
remarkable ability as humans to read situations
and adapt to circumstances” (p.133). Nowadays,
examples of shared space can be found in The
Netherlands, Denmark, Sweden, and the United
Kingdom. Traffic flows are claimed to be improved,
accidents reduced, and public life encouraged
(Hamilton-Baillie, 2008), although little research
has been done yet (Moody & Melia, 2014). This
shared space solution is shown in Figure 24.1
by balancing loop B2. The loop is balancing because
the need for more safety is satisfied by reducing rules,
predictability, and certainty, which increases com-
munication and eye contact and reduces speed of
motorized traffic. This makes streets more attractive
for nonmotorized users, thereby reducing the volume
of motorized traffic and the number of accidents that
in turn reduce the need for more safety (the system is
in balance without making the problem even worse).

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Sharing Space in Organizational Project
Management
The analogy between managing the flows of traffic
in urban design and the flows of projects in organi-
zational project management becomes apparent
when we consider motorized traffic as analogous
to exploitation projects and nonmotorized traffic
(pedestrians, cyclists) to exploration projects.
Similarly, accidents can be viewed as the success
trap of ever-increasing efforts devoted to exploita-
tion projects. As described previously, top manage-
ment of a firm is usually aware (although this
awareness may take some time) that exploration
projects are necessary to fulfill new needs in a
dynamic market. So, they are aware that “accidents”
(investing too much in exploitation) need to be
prevented and that they need to focus on a balanced
portfolio of exploitation and exploration projects.
However, investments can usually only be made
once, and an increase in exploitation projects will
reduce the resources available for exploration pro-
jects (March, 1991). As such, the segregation
begins: resources, such as people, budgets, or test
equipment, are often tied to one project. In addition,
in large organizations, projects that are similar are
usually grouped together in programs, roadmaps, or
departments. The highly innovative, exploration
projects are often executed in specialized R&D
departments, whereas the exploitation projects are
allocated to engineering departments. Likewise, as
Hamilton-Baillie (2008) noted, in urban design,
traffic engineering is responsible for the efficient
movement of motor vehicles, whereas design pro-
fessions are focused on creating a lively public
realm. These two activities are often separated in
distinct departments, in different buildings, into
different levels of government. Further, to control
this portfolio of different projects, organizations use
specific rules, methods, and reporting procedures
that apply to all projects, such as stage gates.
Although the investments in rules and in separate
types of projects may seem to prevent the success
trap, the opposite can also occur unintentionally.
Exploitation and exploration activities need each
other to blossom. Engineers working on exploita-
tion projects may have good ideas for future
exploration projects, either through their own
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Shared Space for Organizations 361
experiences or through conversations with custo-
mers and suppliers. Exploration projects may pro-
vide the foundation for future exploitation projects
in which each project incrementally improves the
big breakthrough product. Separation does not help
this transfer of knowledge between departments.
Further, the divide between these two types of activ-
ities is not fixed. In some periods of the business
cycle, it is better to invest more in exploration;
while in other periods, exploitation is better. As in
traffic, sometimes there are more cars on the road,
and other times there can be more pedestrians. It
does not make sense to wait for a red light as a
pedestrian when there are no cars in sight.
Similarly, it does not make sense to have an exploi-
tation department full of engineers, when there is
more need for exploration projects.
Separation between two activities is likely to
work in favor of exploitation and against explora-
tion. Exploitation projects are often easier to exe-
cute and are more repetitive (routine). They will
yield results in the short term and as a result will
gain support from the board of directors.
Exploration projects take much more time to
develop, they are more difficult to execute, and
more likely to be terminated before completion
because of lack of results, or lack of budget in the
initial stages, or too high risks (Van Oorschot,
Sengupta, Akkermans, & Van Wassenhove, 2010).
As stated earlier, demarcations between activities
promote learning silos and hamper communication
between people performing these activities.
Because exploration is in essence an activity that
requires learning and the creation of new knowl-
edge, it is expected that when learning is impeded,
this activity will suffer more than exploitation: an
activity that mostly reuses existing knowledge.
Going back to Figure 24.1, investing in separation
will likely not prevent “accidents”; instead, over
time, it may aggravate the problem by only strength-
ening exploitation.
How can organizations be structured in such a
way that they can quickly and smoothly adjust to
changing market needs in terms of exploitation and
exploration? And further, how can both activities
be stimulated such that they will bring return on
investments? When the urban design analogy is
used again, the fundamental solution may be shared
 362 Kim van Oorschot
space. Literally translating this concept to organi-
zations, it would mean that there is one big pool
of human resources that is willing and able to do
both exploitation and exploration activities. In a
recession, or when the market demands more
exploration, more engineers would start working
on radical, innovative projects. In a recovery,
or when more exploitation is requested, more
engineers would move toward exploitation. No
walls, floors, or departments should separate
these two activities. Following the analogy, the
situation could allow ideas, knowledge, and peo-
ple to float more freely. Engineers who do not
know what to work on or have a problem that
needs to be solved cannot follow rules because
there would be no rules. Uncertainty is high;
predictability is low. This situation would force
engineers to communicate with each other to
figure out what to work on or how to solve the
problem at hand. Lack of structure in urban design
leads to more eye contact and communication
between different street users. Likewise, lack of
structure in organizational project management
is expected to boost communication and learning
between engineers working within and across
projects and hence would result in more successful
projects. Note that the lack of structure may
reduce the development speed of some projects
(because engineers are pulled away to solve
problems in other projects), but on average the
flow of projects may be increased, as is the case
in traffic.
Enablers for Sharing Space
in Organizations
Removing demarcations between departments,
groups or even projects is easier said than done.
Hamilton-Baillie (2008) writes, in his plea to over-
come the separation between traffic engineers and
design professionals, that organizational, cultural,
and educational change is required. “Shared space,
and the creation of a public realm free of barriers to
simple day-to-day movement and interaction,
requires a change in the ‘mental map’ of every
person as they step outside their front door” (p.
138). Asking organizations to take a big leap,
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remove all structure, and see what will happen
on the long term is not realistic. Nevertheless,
organizations can take small steps, one at a time:
removing rules or parts of the structure bit by bit,
evaluating (also waiting for long-term effects to
surface), redesigning, and trying again. The
impact of the success of a small step can help
change this mental map toward a shared space
structure. In the following section, a number of
examples of such small steps, labeled as
“enablers” for organizational project manage-
ment, will be given. These enablers are not new;
they come from a long tradition in project manage-
ment research. However, it is new to view these
enablers as stepping stones toward a structureless
(or less structured) organization that is dynamic
and capable of dealing with different types of
projects. All these enablers have one thing in
common: they enable (or even force) people to
communicate and share knowledge with each
other. In other words, they break down the
learning silos.
Enablers within a Project
Even within a single project, learning silos can
occur. Many organizations use a staged approach
for moving projects from idea to launch and
beyond. The stage-gate approach, for example,
consists of a series of stages wherein a project
team undertakes the work, obtains the needed
information, and performs data integration and
analysis. Each stage is followed by a gate at
which a “go/kill” decision is made on whether to
continue with the project (Cooper, 2008). As such,
these stages and their gates function as demarca-
tions in the project. Not only are stages in some
projects developed by different, stage-specific
teams (Kaisti, et al. 2013), which can hamper
knowledge transfer from stage to stage, but the
desire to “survive” the next gate meeting, may
induce a team to focus on the short-term, the
next gate, only. Decisions can be made favoring
reaching the next gate, as opposed to the project as
a whole, which can have devastating conse-
quences for the project in the long term (Sethi &
Iqbal, 2008; Van Oorschot, Akkermans, Sengupta,
& Van Wassenhove, 2013).

Instead of a sequential approach, the project team
may choose to overlap different project stages. This
approach is also known as concurrent engineering
(Akkermans & Van Oorschot, 2016; Cooper, 2008;
Loch & Terwiesch, 1998; Terwiesch, Loch, & De
Meyer, 2002). In concurrent engineering a down-
stream stage begins before the upstream stage is
completed; as such, it uses preliminary information
from this previous upstream stage. Because the
information is incomplete, engineers from both
stages are forced to communicate with each other.
As such, a short-term focus on one specific stage is
avoided. The upstream engineers need to keep the
downstream engineers updated about new informa-
tion that is discovered in their stage. The down-
stream engineers can provide early feedback about
how they may or may not use the information
passed on by the upstream engineers. Accordingly,
learning cycles between the two stages arise.
There is the risk that these learning cycles may
turn into never-ending rework or problem-solving
oscillations, which is why many researchers discou-
rage concurrent engineering in settings with high
levels of uncertainty (Cantamessa & Villa, 2000;
Krishnan, Eppinger, & Whitney, 1997; Loch &
Terwiesch, 2005). However, recent research
suggests that in highly uncertain (explorative)
projects, the benefits of the learning cycles out-
weigh the disadvantages of rework oscillations
(Akkermans & Van Oorschot, 2016).
When project teams do prefer the sequential
approach but still want to prevent short-term, gate-
oriented thinking, Gersick (1994) recommends
time-oriented gates or milestones, instead of
event-oriented gates that are most common in
staged approaches. In projects with high levels of
certainty and predictability, what needs to be done
in each stage can be clearly identified, and therefore,
also what needs to be evaluated at each gate. In
projects with high levels of uncertainty, such
event-oriented gates are not recommended, because
it is uncertain when an event will occur or even if
the event will occur. Therefore, in these projects,
time-oriented gates or review points are much more
useful. Temporal pacing is useful in situations
in which the path to and specification of the final
outcome are at least partly indeterminate (Gersick,
1994). These projects can still consist of stages and
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Shared Space for Organizations 363
gates, but the gates are scheduled, for example,
every month, forcing the project team to evaluate
and adjust project progress on a regular basis, with-
out focusing on surviving the gate. It is suggested
that the better the match is between the temporal
pacing and rate of environmental change, the more
adaptive the team will be (Gersick, 1994; Vigden &
Wang, 2009).
In recent years, this temporal pacing has
become the core component of agile development
methods. An agile method focuses on adapting to
change through highly iterative development and
test cycles (Conboy, 2009; Dingsøyr, Dyba, &
Moe, 2010). Product requirements are discussed
and prioritized with customers and placed in the
backlog for the next iterative cycle (Dingsøyr,
Dyba, & Moe, 2010; Fowler & Highsmith,
2001). These cycles often have the same length
(a so-called “sprint”). Because testing is done
much earlier (and more frequently) in the
project than in sequential approaches, these
agile approaches are also a way to breakdown the
learning silos between developers and testers.
Although agile approaches originated in software
development projects, manufacturing firms are
also introducing this approach (Sommer,
Hedegaard, Dukovska-Popovska, Steger-Jensen,
2015). Recent work by Cooper and Sommer
(2016) explains how a hybrid agile-stage-gate
model can be beneficial for the development of
physical products. Improved communication
and increased learning within the team also play
a critical role in this model.
Enablers within the Organization
The most obvious solution to prevent learning
silos in organizations is to literally implement a
shared space, or in other words, colocate everyone
working on either exploitation or exploration
projects. Raffi (1995) argued that if workers cannot
be colocated, they might as well be miles apart,
since even a small distance (even a different
floor in the same building) between them will nega-
tively affect the degree of trust and cooperation
(McDonough, Kahn, & Barczak, 2001). Face-to-
face communication is especially desirable when
coordinating complex tasks (Olson et al., 2002).
 364 Kim van Oorschot
Srikanth and Puranam (2014) found that colocated
projects depended mainly on ongoing communica-
tion for coordinating. Face-to-face communication is
not only powerful; it is also essentially free (Mani,
Srikanth, & Bharadwaj, 2014). A specific instance of
colocation is resource pooling, in which engineers
are cross-trained and capable of a variety of tasks.
Resource pooling is usually described as a mechan-
ism to reduce quueing (Loch & Terwiesch, 1999),
but it can also break down demarcations between
engineering specialties. When engineers are pooled
or colocated it will be easier for them to ask for
help and provide feedback to each other. Recently,
Harrison and Rouse (2015) have demonstrated the
connection between feedback and creativity. Their
findings suggest that feedback is the result of the
interaction between feedback providers and creative
workers, and not a one-sided passing of information.
Colocation supports this interaction.
However, when creativity leads to new ideas
for exploration projects, it is important that these
projects are not killed prematurely. Many organiza-
tions rely on financial tools to make go/kill
decisions. These tools favor exploitation projects
whose financial forecasts are reliable (Cooper,
2013). To prevent this financial focus, it is recom-
mended that the organization’s executive and board
levels are aligned in terms of a shared long-term
vision and strategy regarding the exploitation–
exploration balance (Rosenblatt, Rogers, & Nord,
1993; Walrave, Van Oorschot, & Romme, 2011).
Instead of acting as gatekeepers, board members
need to engage in developing a long-term perspec-
tive on shareholder value to prevent too strong a
focus on exploitation projects (Walrave, Van
Oorschot, & Romme, 2015). As such, it is not only
at the level of engineers that learning silos between
specialties need to be removed to increase feedback,
learning, and creativity. Research suggests that
demarcations between top management and board
members also need to be eliminated to make sure
that creative ideas will find support and can lead to
new breakthrough innovations.
Enablers within the Project Network
Besides enablers within one project or within
one organization, enablers can exist between
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organizations or within a project network.
Projects are rarely executed by one organization
alone. Typically, organizations work together
with suppliers and with customers, and in some
cases customers may even be suppliers in the
same project; e.g., in embedded systems develop-
ment, a software provider delivers software to a
hardware provider (customer), but this hardware
provider is often also responsible of delivering
test equipment (supplier).
Collaboration in projects between two or
more organizations requires knowledge sharing
and trust (Hsu & Chang, 2014; Zimmermann and
Ravishankar, 2014). However, knowledge sharing
in product development can be problematic,
because this knowledge may be about core technol-
ogy of one of the organizations; that is, knowledge
that defines the organization’s competitive advan-
tage. This is usually the type of knowledge that
organizations want to protect (Connelly, Zweig,
Webster, & Trougakos, 2010). Without rules
that protect intellectual property, organizations
face the risk of imitation (Butler & Grahovac,
2012; McGaughey, Liesch, & Poulson, 2000).
However, as in traffic, where rules may reduce
instead of increase the flow of traffic, rules and
formal contracts that protect knowledge may not
only reduce the knowledge flows about core tech-
nologies, but also about potentially new product
ideas. Reduced knowledge sharing will reduce
trust between the collaborating organizations
and this stands to negatively affect the creativity
of these organizations (Černe, Nerstad, Dysvik, &
Škerlavaj, 2014; Nielsen & Nielsen, 2009;
Potter & Lawson, 2013). This can cause a declin-
ing number of exploration projects in the long
term (Anderson & Lewis, 2014). When organiza-
tions do not use knowledge-protection mechan-
isms, there will be imitation, but because of the
increased trust, feedback, and learning between
organizations, creativity is likely to be positively
influenced in the long term (Černe, Nerstad,
Dysvik, & Škerlavaj, 2014).
An interesting example of customer collaboration
without knowledge protection comes from the
Dutch company ASML. This organization provides
leading-edge imaging solutions to enable manufac-
turing processes in the semiconductor industry.

In 2011, despite macroeconomic uncertainty,
ASML posted record sales for the second year in
a row – €5.65 billion. Answering customer needs
through rapid innovation is credited as the reason
for this remarkable performance (Chick,
Huchzermeier, & Netessine, 2014). To continue
this strategy, and thus to keep accelerating the
development of new lithography technologies,
ASML and three of its large customers – Intel,
TSMC, and Samsung – agreed in 2012 to launch
the Customer Co-Investment Program. The three
participating customers agreed to fund €1.38 billion
of ASML’s research and development projects from
2013 through 2017. This program not only creates
risk sharing with some of the largest customers,
the results of ASML’s development programs will
also be made available to every semiconductor
manufacturer with no restrictions (ASML’s corpo-
rate website). Sharing risks and knowledge with
customers is one thing, but making new knowledge
available to every semiconductor manufacturer with
no restrictions is a bold move, nevertheless, a move
that fits perfectly with the idea of “shared space.” It
will be interesting to analyze what the effects of this
strategy will be for ASML in the future.
Conclusions
In this chapter, I discussed the concept of shared
space within organizational project management as
a way to boost creativity and innovation. Changes in
the business environment require organizations
to make strategic adaptations that in turn call for
(re)balancing the project portfolio. During some
periods in the business cycle, more exploitation
projects are necessary; other periods require more
focus on exploration. The balance between these
two is not static but dynamic; therefore, executing
a dynamic strategy needs to be supported by an
organizational structure that can handle a changing
focus. Usually, organizational structures create
demarcations between groups, teams, departments,
or projects that automatically lead to learning silos.
Consequently, this chapter examines what kind of
structure can deal with strategic changes and in turn
changes in the product portfolio, while breaking
down learning silos between departments and
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at https://www.cambridge.org/core/terms. https://doi.org/10.1017/9781316662243.030
Shared Space for Organizations 365
projects. The ideal structure for this may be no
structure at all, or a removal of the existing struc-
ture. An example from urban design, called “shared
space,” is used as a source of inspiration. The con-
cept of shared space in traffic has shown that remov-
ing rules, traffic signs, and demarcations in streets
leads to more eye contact between motorized and
nonmotorized traffic that slows down the speed of
motorized traffic, increases safety, and increases the
average traffic flows. Counterintuitively, reducing
street demarcations originally meant to reduce acci-
dents, increases safety and traffic flows. Several
examples from a project management context were
discussed that have similar effects. These so-called
enablers for organizational project management
remove demarcations (rules and structures) between
projects and organizations, thereby increasing com-
munication within and across project teams and
organizations. This increases the flow of knowledge
and as such benefits creativity and innovation. In
their quest for a good, balanced project portfolio,
organizations struggle most with executing a suffi-
cient number of exploration projects. Therefore,
enablers that support creativity and innovation are
extremely important for innovative organizations.
The list of enablers that is provided in this chapter
is not conclusive. The objective is to provide the
reader with a new frame of mind, inspired by urban
design, demonstrating that more rules and structures
are not always helpful and may have counterintuitive
and more importantly, counterproductive results. In
this chapter, several examples of rules and structures
in a project management context have been discussed
that may have similar counterproductive results.
In addition, organizational enablers have been
presented that reduce rules and structures and
increase learning between engineers, projects, and
organizations. Hopefully, the examples and enablers
may inspire researchers and practitioners to think
differently about structures, learning silos, and
knowledge flows. This may benefit innovation rates
in organizations in the future.
Summary
This chapter examined what kind of organizational
structure can deal with dynamic strategies that lead to
 366 Kim van Oorschot
constantly changing project portfolios (in terms of
the number of exploitation and exploration pro-
jects the organization invests in) while breaking
down learning silos. To stimulate communication
and learning in traffic situations, urban designers
have introduced the concept of “shared space.”
This example shows that removing street demar-
cations, rules, and traffic signs (originally meant
to reduce accidents), counterintuitively increases
safety and traffic flows. Several examples from a
project management context are discussed that
have similar effects. Examples are taken from
previous research and focus on different levels:
within projects, within organizations, and within
project networks. In addition, enablers for
organizational project management have also
been presented. These enablers remove demarca-
tions (rules and structures), thereby increasing
communication within and across project teams
and organizations. This increases the flow of
knowledge and as such benefits creativity and
innovation. In their quest for (re)balancing their
project portfolio, organizations struggle most
with exploration projects. Therefore, enablers
that support creativity and innovation are extre-
mely important for innovative organizations.
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 CHAPTER
25
Social Media and Project
Management
Symbolism in Action
HÉLÈNE DELERUE and TOM CRONJE
Introduction
This chapter examines some reasons why project
teams would use social media. Social media were
just beginning to be co-opted by business interests in
the 2010s (Kiron, Palmer, Phillips, & Kruschwitz,
2012): early adopting firms – the ones that tend to
adopt social media applications – can be viewed as
innovators, driven by efficiency and profit gains
(e.g., Delerue & Cronje, 2015; Perrigot, Kacker,
Basset, & Cliquet, 2012). Social media generally
provide:
Web-based platforms that allow workers to (1)
communicate messages with specific coworkers or
broadcast messages to everyone in the organiza-
tion, (2) articulate a list of coworkers with whom
they share a connection, (3) post, edit, and sort text
and files linked to themselves or others, and (4)
view the messages, connections, text, and files
communicated, articulated, posted, edited and
sorted by anyone else in the organization at any
time of their choosing. (Leonardi, Huysman, &
Steinfield, 2013, p. 2)
The development of complex products, services,
and processes with very short time-to-market
combined with needs for cross-functional expertise
have compelled increasing numbers of organiza-
tions to implement their business operations as pro-
jects (Kerzner, 2002). Projects have been described
as temporary organizations that are strongly focused
on a defined task, and therefore very agile.
In addition, projects are ephemeral in the sense
that the knowledge that is gained through the project
quickly evaporates after the project team is dis-
banded (Gemü nden, 2013, p. 2). An essential com-
ponent of project execution is the information that
370
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feeds decision making and knowledge creation.
Some researchers therefore view social media –
which are used to convey information – as valuable
for project management (Harrin, 2010; Remidez &
Jones, 2012; Rimkuniene & Zinkeviciute, 2014).
For instance, Rimkuniene and Zinkeviciute (2014)
demonstrate how social media can enhance effec-
tive communication in temporary organizations by
addressing specific project-based needs. Remidez
and Jones (2012) emphasize that project managers
must understand the relationships between commu-
nication practices and trust development, and how
they are affected by social media. According to
Harrin’s (2010) study on social media in project
environments, over two-thirds of 181 project man-
agers surveyed across thirty-two countries believed
that social media constitute a key issue for their
industry (Harrin, 2010). However, despite the anec-
dotal evidence on the importance of social media for
projects as well as the growing interest by practi-
tioners in the potential benefits of social media
for their projects, only a few project management
studies have addressed this topic or explored how
organizations use social media for internal commu-
nications and social interaction between project
team members.
On the one hand, successful project manage-
ment requires forming and maintaining relation-
ships between and among project team members
and various stakeholders. Therefore, it is critical
to ensure good-quality communication among
team members as well as the capacity to capture,
retain, and index project-related information and
knowledge (Weiser & Morrison, 1998). On the
other hand, the use of social media is considered
an effective approach to communication and

collaboration among individuals and groups both
within and outside the firm (Huy & Shipilov,
2012; O’Leary, 2011). Further, social media
generally come with tools that capture and retain
information for later retrieval (Treem &
Leonardi, 2012). Some project management prac-
titioners therefore see similarities between project
management and social media: both are strongly
focused on communication and engagement
(Stronach, 2012).
Yet despite the potential advantages of social
media for projects (Sponselee, 2016), these applica-
tions are rarely used. In fact, Harrin (2016) notes
that social media use in the workplace is actually
declining. In an empirical study based on the opi-
nions of experts and professionals in Europe and
Australia on social media use in projects,
Rimkuniene and Zinkeviciute (2014) find that tem-
porary organizations continue to prefer traditional
modes for direct communication, tending to stick to
combinations of emails and the telephone. Only
one-third of the respondents used an intranet. This
low use of social media tools in temporary organi-
zations suggests the presence of restraining factors
that may discourage temporary organizations from
using them.
Why do some project teams choose to use social
media whereas others do not?
Projects create universes, in which the acts of
seeking and using information, as well as initiating
and developing interactions have important
symbolic value for the actors. Indeed, knowledge
and information are symbols of competence – in
the sense that individuals and groups with more
information and knowledge are considered better
off than those with less – and hence symbols
of social efficacy (Feldman & March, 1981).
Interactions are also symbolic, as they are
conducted in terms of the meanings that people
assign to things (Blumer, 1969). The development
of social media means that information and
information systems are increasingly enabling
human activity and symbolic action in order to
build identities, coordinate relationships, and make
sense of the environment (Aakhus, Ågerfalk,
Lyytinen, & Te’eni, 2014). As Aakhus et al.
(2014) point out, “from a symbolic action perspec-
tive, information systems are theorized not simply
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Social Media and Project Management 371
as information processors and conduits of transmis-
sion but as part of ‘meaning engagement practice’”
(2014, p. 1188).
In this chapter, we propose that symbolic
meanings and actions can explain why project
teams use social media. Several studies have been
conducted on enterprise social media (ESM) and
social media in work organizations (Leonardi
et al., 2013). However, studies that focus specifi-
cally on the project level are rare. Organizations
may be “conceptualized as bundles of activities
grounded in language and communication” (e.g.,
Aakhus et al., 2014). In a project, which may be
considered an organization, social media can help
symbolically manage relationships, information
exchange, and sharing.
To understand why project teams use social
media, we illustrate with a case study of a project
team working in a large telecommunications
company (approximately 8,000 employees).
The company developed a social media policy in
2010 and uses social media tools to conduct its
projects. Data were collected from semistructured
interviews held with a focus group comprising five
of the fifteen members of a project team (including
the manager) that was mandated to develop an
information system.
Understanding Social Media Use
in Projects
Although new forms of information and
communications technology (ICT) are increas-
ingly available to project managers and project
team members, they have not been universally
embraced. Social media, including blogs, wikis,
social networking sites (SNS), and microblogs,
are being used to facilitate project communication
(Harrin, 2010). Carlson, Zivnuska, Harris, Harris, and
Carlson (2016) find that the more the use of
social media, the more the improvements in task-
oriented behaviors (e.g., mental skills and
capacities that can enhance employees’ abilities
to perform their job) as well as in relationship-
building behaviors (e.g., behaviors intended to
build and maintain work-related relationships
and professional networks).
 372 Hélène Delerue and Tom Cronje
However, some social media tools seem to be
more appropriate than others for daily activities.
For instance, Harrin (2010) argues that, in
a project setting, the blog is the equivalent of
the project notebook or shared project log.
Blogs can build relationships between team mem-
bers, making them feel that they are part of
a greater whole. Blogs can also provide a way
for people outside the project team to keep abreast
of project progress. On the other hand, “SNS
have very little to do with the day-to-day running
of projects” (Harrin, 2010, p. 18). However,
other authors propose that SNS can be used to
get information from selected colleagues based
on shared interests, affinities, or expertise.
Go and You (2016) conclude that not all social
media are the same: organizations employ diverse
social media applications in a combinatory
manner – closely linked to organizations’ social
media strategies – in order to maximize the syner-
gistic effects.
The deployment of social media tools requires
several conditions, as identified by Harrin (2016):
access control, to ensure that the right people
have access to the right data; backups, to ensure
that project data can be retrieved; audit trails,
to see who has logged into the system and what
tasks they have performed; authorized software,
to ensure that project teams use products that
have been vetted and approved by a corporate
IT department or equivalent; and policies for
handling system abuse, in order to define
acceptable uses. Therefore, in order to integrate
social media into an information system, both
organizational and managerial support are needed
(O’Connor, Schmidt, & Drouin, 2016). According
to one of the interviewees in the case study:
Sharepoint was used from project outset, since all
relevant project documents are posted on this plat-
form, but I believe that not all the project partici-
pants necessarily comply with this requirement,
due to either personal reasons or because they are
not convinced about the advantages of a fully
shared document platform. Our company has
drawn up and implemented a social media policy,
but even though there’s a formal document, it
doesn’t establish a situation of total trust, which is
required for everyone to share their information.
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Collaboration is still required for social media to
be used effectively.
Generally, the social media that companies use are
private systems developed as in-house applica-
tions and, as such, they are not accessible by
external audiences (Leonardi et al., 2013). These
private systems are usually installed on company
servers or hosted in the cloud. Some examples are
Sharepoint (Microsoft), Yammer, Connections
(IBM), Jive (Jive Software), Social Network
(Oracle), Webex Social (Cisco), Jibbr (Tibbco),
and BlueKiwi (Atos). These social media systems
integrate the full range of public social media
functionality (Leonardi et al., 2013). For instance,
DiMicco et al. (2008), in their examination of the
Beehive system developed by IBM, conclude that
the overall site design is similar to social network-
ing sites such as Facebook and MySpace in that it
supports a user-created articulated social network
with content sharing and customized profiles.
Because social media are used for a variety of
reasons, the definition of social media may reflect
how technologies are mutually constituted with
the organizational context in which they are
embedded (Leonardi, 2009). Treem and Leonardi
(2012) argue that visibility, persistence, editabil-
ity, and association (or relationship) are four
affordances that, in combination, describe the
new social media and their potential consequences
for organizational communication processes.
These combined affordances allow people to
communicate in new ways and to adjust media
functions to the content of the message. As one
interviewee points out:
We use different social media functions and
tools . . . It depends on what we want, exactly, for
instance, the information we want to communicate
or share and how we want to communicate it . . .
It also depends on the project cycle phase . . .
Sharepoint is used from project outset, since all
relevant project documents are posted on this
platform . . . But only a small group has access . . .
And then we use Yammer more as a microblog, but
Yammer also helps us coordinate tasks during the
execution phase . . . All employees have access to
Yammer . . . This way we can find “people” who are
not members of the project but who can also
help . . . [people who] can just provide information

or their experience . . . so we can develop other
relationships outside the project itself.
Project Social Media and Symbolic
Meanings
One of the basic tenets of symbolic interactionism is
that individuals act based on the meanings that they
have assigned to objects. These meanings
are developed through interactions with other indi-
viduals and with society, and are continuously cre-
ated and recreated as they are reinterpreted during
interactions with others (Blumer, 1969). In this per-
spective, social media may be considered as objects
that are given meanings. “The object’s meaning is
the effects it has on the world” (Hodder, 1994,
p. 12). The use of social media would therefore
depend on the symbolic meanings that they are
given. Indeed, studies have shown that the medium
of communication is often selected for its symbolic
meaning and representation, which transcend the
explicit message. A manager’s choice of media
therefore becomes a symbolic communication
behavior (Stryker & Staham, 1985). In other
words, media carry symbolic cues beyond the
obvious content of the message (Stryker, 2001),
such that the medium itself is a message
(McLuhan, 1964; Trevino, Lengel, & Daft, 1987).
Case studies by Stocker, Richter, and Riemer
(2012) provide many illustrations of these symbolic
meanings, which guide the choice of one social
media platform over another. An employee at
Capgemini, a French multinational management
consulting corporation, explains the use of
Yammer as follows: “As soon as I heard that this
tool was being used it seemed to transcend most of
the geographical boundaries. I just jumped on it
because of that sense of global community . . .”
(2012, p. 208). Stocker et al. (2012) point out that:
“Yammer in Capgemini is neither used to inform
others about themselves (like we see with Twitter)
nor to inform about immediate task/team context as is
the case in the next example below [Commundardo].
Rather, it is an open discussion space that serves the
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Social Media and Project Management 373
purpose of context building, information sharing and
problem-solving.”
As one of our interviewees puts it: “I think that
social media such as Yammer help develop group
cohesion and trust.”
Therefore, the choice of an application can have
different meanings, and applications may be used for
different purposes. According to Neilsen and Rao
(1987), the legitimization of these meanings creates
a symbolic universe that incorporates representations
and realities. For example, some team members
equate social media use with innovation and dyna-
mism. Project teams who do not share this represen-
tation are considered backward and obsolete.
Communication is the most elementary compo-
nent of the project team and has long been consid-
ered one of the critical process skills for project
success (e.g., White & Leifer, 1986). High-quality
communication takes place when team members
spend sufficient time communicating with each
other, exchanging information both formally and
informally, and talking directly to each other, all
in the aim of understanding the internal and external
environment. In projects, symbolic communication
is important for multidisciplinary cooperation,
because negotiations about task divisions or design
specifications, for example, are formulated mainly
in symbols and structured by symbolic order
(Duncker, 2001). For instance, the order of tasks is
established based on shared symbolic representa-
tions that are reconstituted from symbolic reper-
toires (Schwartz et al., 2013). Repertoires have
been defined as discourses mechanisms, or linguis-
tic varieties that enable actions within a given group
or community (Duncker, 2001).
As one of our interviewees puts it:
I recently read that the key to making headway on
a project is to find a shared language . . . I was very
comfortable when we started using social media at
work . . . I am completely sure that chat, microblogs,
blogs, and so on, because they make us write simply
and specifically, allow us to create a common lan-
guage, and . . . also allow us to share specific project
management terms with anyone else who doesn’t
have this culture within the team.
 374 Hélène Delerue and Tom Cronje
Project Social Media and Symbolic
Objectives
Whereas users of information systems act with sym-
bols (which are either embedded in or surround the
system), these actions are in turn enabled and con-
ditioned by symbols and their interpretation
(Aakhus et al., 2014). Thus, the symbolic nature of
social media systems creates a symbolic universe in
which social media may enable or constrain specific
forms of action: actions are mediated by symbols
and given their meaning by symbols, and these
meanings in turn influence behaviors. The social
media themselves are thus at the core of the sym-
bolic actions.
We argue that project teams use social media to
carry out symbolic actions in order to accomplish
implicit symbolic objectives such as group identifi-
cation, transparency, reviewability, and knowledge
management.
Group Identification
It has been suggested that social media can improve
team identification (Yardi & Boyd, 2010), or the
degree to which team members perceive a sense of
“oneness” with a particular group (Ashforth &
Mael, 1989). The team identification concept
stems from social identity theory, according to
which people tend to classify themselves and others
into social categories based on individual character-
istics, such as personal interests (Tajfel, 1978).
In this sense, individuals identify with particular
groups and differentiate themselves from other
groups.
First, media tools can foster stronger engagement
by conferring in-group status (they can also foster
the development of community feelings). The result
is team identification, which has motivational and
behavioral consequences. Specifically, individuals
who identify strongly with the team are more liable
to engage in behaviors that are congruent with and
expressive of the team identity. Team identification
encourages individual members to contribute to the
collective by acting in team-typical ways (Janssen &
Huang, 2008). As one interviewee explains:
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Everyone can make social media comments.
This allows others to respond with questions or
alternatives. For example, say that someone says
that he or she couldn’t do something because of
some problem . . . then someone else might
respond by saying, “Thanks, we didn’t think
about that. I’ll think about the problem and try
to resolve it and get back to you as soon as
possible.” . . . or maybe suggest changes that
might make it possible, or even suggest which
other people could help with the problem if it’s
critical. The responder might also ask more
questions to get more information about the situa-
tion so they can give their advice. These micro-
interactions make us feel part of the team, and
they build group cohesion and trust.
Second, social media also create a symbolic uni-
verse in which the technology applications and their
functionalities are available to all members who can
use them autonomously, moderately, and appropri-
ately, according to communication needs. This is an
important factor for project management. Indeed, it
has been shown that effective communication and
interaction are affected by the project’s degree of
uncertainty (e.g., lack of information for managing
a given task; Galbraith, 1973) and equivocality
(e.g., multiple and possibly conflicting interpreta-
tions of the information or its interpretive frame-
work Sakka, Barki, & Côté, 2016). When both
uncertainty and equivocality are high, a project
manager may interact more with the project team
members in order to clarify project information and
issues and to encourage collaborative solution mak-
ing (Sicotte & Langley, 2000). When uncertainty
and equivocality are low, less interaction may be
needed, as it would waste the team’s time and
efforts and generate information overload (Chong,
1996), which could negatively affect project perfor-
mance (Sakka et al., 2016). As one project team
member explains:
Anybody can respond . . . no one is left out . . .
Anybody can use the tool when they want, if they
think it’s necessary. It’s all this freedom of action
that increases both project flexibility, because it’s
possible to resolve problems more quickly when
they arise, and makes it possible to adapt the
communication and interactions to the different
tasks and project steps.

Another team member adds:
This lets us manage the duality within the team.
There are tasks that we do together, that have to be
coordinated, but there are also tasks that we have to
do by ourselves at times.
Autonomy can also develop within projects.
Projects often include experts who are responsible
for making critical decisions. Autonomy is
therefore one of their most important qualities
(Chasserio & Legault, 2010). Nevertheless,
although autonomy is required for R&D projects
and innovation, it can create tension in terms of
control over the work (Gué rin, Wils, & Lemire,
1996). For example, some members of our focus
group thought that “the problem with social media
is that project managers can feel like there’s a loss
of control[,] . . . not sure if their role should be as
head of the orchestra or as controller.”
Transparency
Social media also facilitate interactions that are
driven by individual interest in acquiring knowl-
edge, such that actions tend to be better grounded
(Goles & Hirschheim, 2000). Unlike traditional
ICT, for example emails, which only the participat-
ing parties can see, social media render communi-
cations visible, conferring greater transparency.
As one team member explains:
The discussion is open. Everyone can contribute
in real time, and it’s easy to interact . . . Before, we
didn’t know who to contact if we needed to
make a change. We had to plan a meeting . . . So,
social media not only increase the operational
flexibility of the project, but also flexibility of
communication.
Another project team member adds:
We use ActionNote a lot between meetings so we
can update everybody on our progress and the
work that has been completed. The status of all
the project components is therefore known at the
start of the next meeting. It allows us to have
more informed discussions at the meetings, and
it prevents needless extra communications and
interactions.
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Social Media and Project Management 375
Social media are metacommunicative in the sense
that, as information systems, they symbolize and
signal communicative metaroles and interrelations
that actors can engage in (Ågerfalk, 2004). Further,
they allow metaknowledge, or knowledge of who
knows what and who knows whom (Leonardi,
2014). Metaknowledge plays a significant role in
effective transactive memory systems (Yuan, Fulk,
& Monge, 2007), or collective systems that are used
by closely connected individuals to encode, store,
and retrieve knowledge (Hollingshead, 1998).
DiMicco et al. (2008), in an investigation of
how IBM employees use an internal SNS called
Beehive, show that the system helps employees
learn more about coworkers’ backgrounds,
interests, and activities. As one of our intervie-
wees explains: “The other advantage is also, that
we know where this information comes from,
who gave it . . . which increases transparency, in
the end.”
Transparency is one way of overseeing what gets
done. As one project manager explains:
Everybody provides updates on what they’ve done
so far. Everybody reports their status, and me, when
I come in, as project head, I just review all the
comments. Sometimes, there are comments about
certain actions, or they’ll ask questions: “I couldn’t
do such and such,” or “A problem came up,” and
somebody else will respond, “OK, we’ll look at this
after the meeting,” so all this lets me check and
correct when we have to make a change.
Reviewability
The Project Management Body of Knowledge
(PMBOK® Guide) published by the Project
Management Institute (PMI) underscores the
importance of collecting and documenting lessons
learned and implementing process improvements
(PMI, 2008). However, it is unclear how lessons
learned from projects can be disseminated through-
out an organization and incorporated into organiza-
tional practices (Duffield & Whitty, 2015).
As Treem and Leonardi (2012, p. 155) point out
“When a poster to a blog or SNS logs out, that
information remains available to users and does
 376 Hélène Delerue and Tom Cronje

not expire or disappear . . . Because social media
enable conversations that persist past the time of
their initial posts, communicative acts can have
consequences long past the initial point of
presentation.”
The use of social media not only enables knowl-
edge to be accumulated throughout project execu-
tion, it also enables building a database for future
reference. As one project team member explains:
“So! All the information will be retained. Everyone
can re-consult it at will. It constitutes an information
pool, or simply, we could call it the memory of the
project.”
Knowledge Management
Social media can be viewed as informal knowledge
management systems (Cao, Vogel, Guo, Liu, & Gu,
2012) as well as “second-generation knowledge
management” systems that can facilitate the creation
of new knowledge by the community (Isuru, 2010).
In fact, recent studies have found that developing
close relations with others facilitates knowledge
sharing and creation (e.g., Chow & Chan, 2008).
Therefore, the more the social interaction ties
between users, the more the knowledge-sharing
activities within social media environments
(Kwahk & Park, 2016).
Some authors view the project as a problem-
solving process (e.g., Aladwani, 2002; Khatri,
Vessey, Ramesh, Clay, & Park, 2006). In this
view, projects require interdisciplinary collabora-
tion as well as knowledge sharing and transfer
between business and technology experts (Lin
et al., 2015). Project team performance is there-
fore determined by the extent to which a team can
cope efficiently and effectively with problems as
they arise (Thomke & Fujimoto, 2000; Lin, Chen,
Hsu, & Fu, 2015) as well as the team’s capacity to
share and transfer knowledge across domains
(Tesch, Sobol, Klein, & Jiang, 2009; Lin et al.,
2015). Social media offer potential solutions for
sharing information quickly, globally, and among
large numbers of individuals, and for supporting
organizational knowledge flow (Wasko & Faraj,
2005). Consequently, by means of electronic
practice networks – collections of geographically
separated individuals who share common interests
but are loosely affiliated and who communicate
via technology-mediated channels (Wasko &
Faraj 2005) – ESM can foster interpersonal
knowledge exchanges among employees
(Leonardi et al., 2013). They are therefore promis-
ing solutions for improving knowledge exchange
among colocated employees (Beck, Pahlke, &
Seebach, 2014) and distributed coworkers
(McCreery, Vallett, & Clark, 2015). Knowledge
sharing and transfer become active knowledge
construction processes involving symbolic action
and the use of questions and answers (Beck et al.,
2014). Social media can therefore change
how humans interact within a symbolic social
interaction system (Ågerfalk, 2010).
According to Biocca, Harms, and Burgoon
(2003), social media can enable new forms of
symbolic action that express social presence and
the belief that one has access to other people’s
knowledge. Social presence (Short, Williams, &
Christie, 1976) is widely believed to be rooted in
the social psychological mechanisms that have
evolved to enable unmediated human interactions
(Biocca, Harms, & Gregg, 2001). Because people
can feel present in either real (unmediated) or arti-
ficial (mediated) situations, social presence may be
regarded as the psychological sense of being in
contact with a perceived intelligence that simulates
other minds (Biocca et al., 2003). The “other” is
a symbolic construction that is created through
interaction (Biocca et al., 2003). The more the user
interaction resembles in-person communication, the
higher the perceived social presence (Kruikeme,
van Noort, Vliegenthart, & de Vreese, 2013). Beck
et al. (2014) find that the more that knowledge
seekers engage in symbolic action to establish
their social presence within a network, the higher
their perceived quality of the knowledge that is
exchanged. In an investigation of social media
tools, Lim, Hwang, Kim, and Biocca (2015) also
find that the level of engagement via social media is
positively associated with feelings of social pre-
sence. In our interviews, the role of social presence
is revealed in comments such as:
It’s a little like a vicious circle. Everybody has to
use the tool, so I find it ridiculous to write messages

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when there’s no response . . . or nobody pays any
attention . . . It happens sometimes. Not only does
this hinder project performance, but it’s very dis-
couraging. Social media should be used regularly,
and not just when they feel like it.
As Isuru (2010) points out, “Social media adop-
tion is less about the tools but rather the strategies
and the attitudes of the people and the community
driving it.” The norm of reciprocity, also called
the rule of reciprocity, is the expectation that the
provision of favors to others will be reciprocated
in the future (Chiu, Hsu, & Wang, 2006). This
norm underlies the creation and preservation of
cooperative behaviors (Wasko & Faraj, 2005).
Miranda and Saunders (2003) investigated reci-
procity in the context of shared meanings created
from information shared over the Internet. They
contend that “. . . intersubjective construction of
meaning necessitates reciprocity” (2003, p. 89),
and they show that the lack of social presence in
electronic communications impedes reciprocity
and interactivity. Social presence therefore legit-
imizes the use and usefulness of feedback, or the
extent to which people believe that feedback helps
them improve their performance on a particular
task (Geister, Konradt, & Hertel, 2006).
According to Walter, Ortbach, and Niehaves
(2015), perceived social presence has a direct
positive effect on the perceived usefulness of
feedback. And when people feel that feedback is
useful, they are more likely to change their beha-
vior accordingly and to take the feedback into
consideration when performing tasks in the future.
Social presence can also be viewed as a group
construct (Garrison, Anderson, & Archer, 2010).
This perspective introduces a new dynamic: the
group’s capacity to work together on a problem-
solving activity and the amount of time that indi-
vidual group members spend on the activity
(McCreery et al., 2015). The variation in time
spent can affect individual members’ perceptions
of social presence. In this sense, the group repre-
sentation is dynamically recreated in individual
members’ minds and, consequently, influences
perceived social presence over time (Remesal &
Colima, 2013). A mental representation of social
presence can be maintained through regular use of
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at https://www.cambridge.org/core/terms. https://doi.org/10.1017/9781316662243.031
Social Media and Project Management 377
social media, whereby an individual’s “breadth of
perspectives” increases through contact with other
members and their experience and knowledge.
According to Warshay (1962), individuals with
broader perspectives are better role-takers and
have larger action repertoires. These skills are
even more important for projects, where tasks are
informed by heterogeneous and often complex
sets of knowledge (Patnayakuni, Rai, & Tiwana,
2007).
Conclusion and Discussion
In this chapter, we argue that social media are
adopted based on their symbolic meanings, and
they are applied in order to accomplish symbolic
objectives through symbolic actions.
Project teams therefore develop their use of
social media through a dynamic process involving
symbolic actions. This process is strengthened and
accentuated in groups that seek to accomplish sev-
eral implicit symbolic objectives. Figure 25.1 pre-
sents an influence diagram that maps this dynamic
system in terms of reinforcement or feedback loops
(R1, R2, R3, R4, and R5). According to Slater
(2007, p. 288), in a perfectly closed system, “the
spiral of [social] media selectivity and effects
should work to maximize use of a given type of
media to the maximum permitted by available time
and access and to maximize levels of the cognitions
or behaviors impacted to those permitted by avail-
able capacity.”
The loops represent feedback relationships
that positively influence the behavior of the
system (Forrester, 1975). With respect to social
media use, it is difficult to distinguish between
causes and effects: causes trigger subsequent
events which, in turn, affect the original causes.
Thus, causes become effects and effects become
causes. In other words, writing and sharing via
social media are shaped by symbolic objectives
that are themselves the consequences of social
media use. For instance, social media use rein-
forces group identification (R1) while allowing
team members to feel connected to the team,
which increases transparency which, in turn,
 378 Hélène Delerue and Tom Cronje

Organizational
Symbolic meanings support

Normes of
Meta- reciprocity
+ Knowledge
knowledge
sharing +
+
+ +
Transparency × Knowledge management
Learning about R2 + R4
coworkers Perceived social

+
Team integration + presence
+
+ Project memory

Social media use

Feeling of connection Group identification Reviewability +
to the team R1 R3
+
+
Archived
+
Project team discussions Perceived usefulness of
support and information feedback
+

Figure 25.1. The dynamic development process for the use of social media by project teams.

reinforces feelings of belonging and identification
(R2), which then reinforces the use of social
media. In addition, when discussions and informa-
tion are archived, projects that are conducted by
distributed teams located at different sites can be
informed by the team’s accumulated knowledge.
These distributed team members can then provide
feedback via social media, which reinforces
reviewability (R3). Furthermore, the use of social
media to share knowledge increases the use of
informal knowledge management mechanisms
and allows developing knowledge capital, which
constitutes the project memory (R4). Knowledge
sharing increases with increasing social presence
and engagement. In this way, the perceived use-
fulness of feedback reinforces the use of social
media (R5).
The use of social media in projects cannot
replace face-to-face meetings. Instead, social
media can complement traditional communication
modes in projects, particularly when large
numbers of individuals are involved. Social
media can also enhance communication because
they reduce the time required for meetings.
Both offline and online environments are integral
components of project management. Social media
appear to be used optimally when a team has what
Abfalter, Zaglia, and Mueller (2012) call a “sense
of virtual community,” or “feelings of member-
ship, identity, belonging, and attachment to
a group that interacts primarily through electronic
communication,” despite having a significant and
regular offline dimension. According to Jurgenson
(2012), social media can “augment” offline inter-
actions, and should not be thought of as opposi-
tional to face-to-face interactions. On the
contrary, they appear to improve overall commu-
nication and interaction.
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 Conclusions
RALF MÜLLER, SHANKAR SANKARAN, and NATHALIE
DROUIN
With this book, we intended to contribute to the
development of organizational project management
(OPM) as an ontology – a reality in its own right.
This perspective extends earlier work on OPM,
which merely looked at the concept’s individual
constituting elements, such as project(s), programs,
or portfolios and their management, but rarely took
an integrated view toward the entirety of project-
related work in an organization. To that end, the
book aims to build an understanding that OPM is
more than just the sum of its parts. It is a way of
seeing the industry, public, and other sectors’ reality
as inextricably linked with the integrated system of
OPM elements described in this book. This inte-
grated system exists to a smaller or larger extent in
every company, institution, or public organization
and is described in the book as a large, integrated
organization.
We addressed the challenge of developing this
view (i.e., the ontology of OPM) after experiencing
a wide variety of opinions about the subject when
talking to our academic colleagues, students, and
representatives from many industries and the public
sector. Some of them saw projects, programs, and
portfolios as individual organizational entities that
occupy different levels in corporate hierarchies but
do not integrate to form a larger OPM organization.
Others were attuned to the idea of an integrated
OPM and said it is natural to view organizations in
this way. Hence, we experienced an ontological
clash between those who do and those who do not
see OPM as an integrated organization in its own
right. This book should help the latter group to
develop such an ontology or perspective toward
the project-related parts of the wider organization.
We addressed the task of writing a book about
this integrated view of OPM by looking first at the
three main functions that are impacted by an OPM
thinking. These are: (a) strategy implementation,
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which is through projects, hence the need to
understand the link between strategy and projects;
(b) organizational design, which includes the struc-
tures and the governance of project-related work;
and (c) the people, without whom no project would
be possible and who are the ones to start, execute,
and finish all project-related work. These three
functions constitute the first three sections of this
book. However, we then realized that the subject
of OPM is much wider, going beyond the themes
of the first three sections. Therefore, we included
other, important aspects such as ethics, sustainabil-
ity, innovation, value creation, complexity, market-
ing, and social media in the fourth section of the
book. Again, this was done with the aim to help the
reader to understand how intertwined these subjects
are for executing projects in an organization and
how necessary it is to look at these individual
themes in a holistic way. In other words, the yin
and yang of OPM.
Examples for this interrelatedness are numerous
throughout the book, but to cite just one, Chapter 6
describes the governance of interfaces in projects,
which include the investor, project, and contractor
as separate organizational entities, each of which
has the joint project as part of their particular port-
folio of projects. This highlights the dependency of
each project portfolio on the other organizational
portfolios. This again, is complemented by the two-
way dependency of each project with its portfolio,
where portfolios depend on projects and vice versa
for the execution of the projects on behalf of the
wider organization. To that end, the dependencies
between the OPM elements and the organization
they stem from become stronger than the dependen-
cies between the OPM part of the organization and
the operational parts of it. This strengthens the argu-
ment for seeing OPM from a holistic perspective as
a single organization.
383
 384 Ralf Müller, Shankar Sankaran, and Nathalie Drouin
By publishing this book, we are not claiming to
be the first to expound on this subject. OPM has
been around as a subject for a long time, such as
in the Project Management Institute’s (PMI)
OPM3 Maturity Model (PMI, 2003) for practi-
tioners, Aubry, Sicotte, Drouin, Vidot-Delerue, and
Besners (2012) conceptual work on OPM for aca-
demics, Vaskimo’s (2016) study on methodologies
used in OPM, and Drouin, Müller, and Sankaran’s
(2013) work on research methods for OPM. All these
writers have moved the understanding of the concept
forward and contributed to accomplish the current
state of knowledge, which allows us to look at OPM
as an organization in itself.
The natural question at this point is, ”What comes
next?” We do not have a crystal ball to look into the
future, but we see a few recent developments that look
like a gestalt of what to expect. To benefit from the
quality assurance through the academic peer review
process, we concentrate only on academic literature
here. We see the latest developments in four areas:
• Organization theory: here Carvalho, Laurindo, &
Pessôa (2009) describe the most popular OPM
models in the Encyclopedia of Information
Science and Technology. More recently,
Mossalam and Arafa (2015) have developed
a governance approach for the integration of
OPM into the practices of the wider organization,
and Wen and Qiang (2016) used the resource-
based view (RBV) of the firm to empirically
develop ten organizational enablers for OPM.
• Management theory: these studies focus mainly on
top managers views’ on value creation through
OPM, like Hyväri’s (2016) study on top manage-
ment’s involvement in OPM for successful strategy
implementation; and Oliveira and De Muylder’s
(2012) investigation into managers’ recognition of
value through OPM in government agencies.
• Education: OPM has also entered postgraduate
education in universities. Here, Bergman and
Gunnarson (2014) report on the setup and experi-
ence of teaching OPM classes at university.
• Research: here, Chia (2013) makes specific
suggestions for research paradigms for investiga-
tions into OPM.
This indicates the growing acceptance of OPM as
a concept and a practice. In the near future, we
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foresee further developments in all four areas
mentioned above. Management theorists will most
likely be the first to address the relations and depen-
dencies among the elements of OPM and the
ways to economize on their context dependency.
Developments by organizational theorists will
probably follow the path we saw in research on
temporary organizations, such as starting with
categorizations of OPM approaches and their
modeling, followed by attempts to understand
these from different philosophical perspectives and
then identify the role of OPM in corporations and
the broader society, as well as the implications for
people working therein, leading to theories on OPM
organizing. The pace at which educational institu-
tions take the concept of OPM into the classroom
will be decisive for the speed of integrating practi-
tioner approaches (the What) with academic theory
building (the Why) for contextualizing and tailor-
ing OPM in the most beneficial way for all stake-
holders. Finally, for research methods, we foresee
a slow development, similar to that of studies on
agile, governance, sustainability or ethics, where
academia still struggles to find suitable research
approaches and hesitates to accept contemporary
research methods for contemporary research ques-
tions. To that end, factor and regression analysis
will continue to be around for a long time, while
nontraditional methods will continue to struggle in
getting accepted for publication by reviewers
whose understanding of research methods is con-
strained by existing research paradigms.
Our personal opinion about OPM is that it is
a necessary perspective to understand corporate and
organizational reality. Optimization of economic and
noneconomic benefits can only be accomplished
through continuous efforts to understand the OPM-
organization and tailor it for the achievement of the
objectives of the variety of stakeholders and the
organization itself.
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 Index

4Ps of marketing, 351 business case, 78, 86, 107, 111, 300, 301, 315, 331
5Ps of strategy, 48 analysis, 177, 179
absorptive capacity, 10, 50, 58, 170 unrealistic, 114
adaptive, 47, 315, 322, 332, 363 business decision, 19–30, 223
adaptive capacity, 58 business results, 110, 327
agency theory, 45, 135
agent, 77, 81, 134, 244 capabilities, 10, 12, 44–52, 114, 116, 140, 157, 165, 218, 225,
algorithms, 233 306, 336, See skills
alignment, 62, 100, 115, 224, 238, 305, 330, 339, 340 improvisatory, 256
of objectives or goals, 39, 107, 222, 333 knowledge, 222, 296
of organizational direction, xii leadership, 187
of stakeholders’ needs or expectations, 297, 300 path dependence, 56
of value, 175 people, 153
strategic, 59, 86, 96, 110, 113, 240, 273, 295, 328 self-management, 193
with environment, 33 team, 188, 218
with task, 273 career development, 153, 158, 291
with vision, mission, values, 46 case studies, 24, 35, 48, 52, 98, 120, 124, 218, 220, 243, 253,
ambidexterity, 24, 57, 61, 129, 190 295, 300, 317, 332, 373
AT. See agency theory change management, 33, 236–246, 306
character orientation, 285, 287
balance, 162, 183, 219, 245, 273, 274, 276, 286, 358, 361, circumstance, 290, 360
364, See coordination circumstance dimension, 285
goals, 46 closed action strategies, 100
leadership, 186 cohesion, 10–15
of power, 218 team or group, 261, 373, 374
projects, 61, 365 collaboration, 10, 12, 26, 100, 115, 151, 161, 191, 204, 205,
resources, 87 220, 233, 253, 275, 305, 320, 329, 335, 354, 364, 371,
risks, 95 376
stakeholders, 46, 298, 355 co-located, 376
balanced leadership, 187–197 communication, 11, 88, 99, 162, 181, 188, 205, 208, 219, 223,
balancing loop, 359, 360 230, 238, 255, 259, 272, 275, 301, 305, 354, 357, 360,
behavioral pattern, 251 363, 373
benefit. See benefits climate, 285, 291
benefit-cost analysis. See cost-benefit analysis competencies, 270, 271
benefits, 268, 345, 384 management, 110
anticipated, 314 media, 27, 320
benefits management, 110, 113, 241, 332 real-time, 30
benefits realization, 96, 109, 113, 240, 296, 332, 337, 340 social media, 370
emergence, 100 stakeholders. See stakeholders
programs, 107, 113 structures, 88
project management, 61 competency, 268–277
project portfolio management (PPM), 95 competitive advantage, 9, 15, 26, 35, 36, 41, 46–52, 55–64,
stakeholders, 173 92, 99, 106, 164, 222, 241, 253, 273, 274, 296, 339, 364
value, 305, 326 five forces model, 46, 49
bootlegging, 48, 49, 98, 100 competitors, 47, 49, 89, 111, 261
broker, 83, 84, 90, 122 complex adaptive system, 312

386

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 Index 387

complex organizations, 10, 23, 121, 128, 322 decision making, 12, 13, 23, 52, 56, 61, 98, 112,
complex systems, 93, 138, 313, 317, 321 124, 134, 136, 158, 175, 179, 187, 203, 205,
complexity, 14, 137, 179, 227, 261, 296, 327, 339 225, 226, 256, 271, 277, 278, 285, 287, 292,
dealing with, 202, 215, 251 304, 306, 370
degrees of, 24, 188, 318 influences, 21
first-order, 137 path dependencies, 98
high, 94 delivery project, 19–30
HR Quadriad, 161 dependencies, 95, 303, 317, 383
HRM, 166 value, 306
leadership, 190, 195 design thinking, 138, 139, 143
managing, 115 designers, 21, 29, 299
medium, 19 dilemma, 36, 256, 288, 293, 295
organizational, 311 duty ethics, 286
second-order, 141 dynamic, 15, 95, 121, 201, 209, 273, 311, 357–366, 377
themes, 137 capabilities. See dynamic capabilities (DC)
theory, 311, 312 environments, 56, 59, 92, 96, 262, 312, 314, 316, 317, 323,
thinking, 313 328, 359
value management, 295 HRM, 166
context dependency, 60 learning, 275
contingencies, 58, 60, 63, 123, 129, 218, 253, organizational design, 127
261, 263 strategy, 44, 121, 283
contingency theory, 10, 121, 123, 255 structures, 10, 49
contractor, 19–30, 75–90, 107, 144, 156, 239, 253, 259, dynamic capabilities (DC), 50, 55–64, 253, 255, 262
344–355
control, 11, 19–30, 51, 77, 79, 89, 96, 109, 110, 113, 135, 140, effectiveness, 33–42, 51, 60, 217, 222, 226, 228, 250, 256,
152, 155, 173, 190, 192, 203, 228, 237, 240, 243, 256, 274, 275
270, 311, 312, 315, 332, 361, 372, 375, See performance market, 101
organizational, 23 PPM, 24, 78
project, 23 training, 156
control systems, 359 effectuation, 138, 139, 143
cooperation, 22, 115, 162, 274, 275, 321, 328, 354, 363, 373 efficiency, 33–42, 78, 89, 134, 155, 163, 164, 217, 222, 226,
cooperativeness. See cooperation 270, 314, 370
coordination, 11–15, 88, 94, 122, 129, 161, 162, 192, 204, emergence, 92–102, 139–144, 152, 312, 313, 315
233, 273, 275 complexity, 311
corporate social responsibility, 47, 180, 327 leadership, 187
cost, 24, 37, 38, 78, 84, 101, 110, 296, 302, 314, 338, 345 planned, 334
cost-benefit analysis, 113, 286, 314 rapid, 313, 316
culture, 152, 260, 263 risk patterns, 313
change management, 242 strategy, 92
consequence of successful management, 319 emergent, 167, 191, 201, 243, 271, 278, 311,
diversity, 272, 321 312, 323, 332
group, 317 issues, 137
international, 227 phenomena, 98, 202
knowledge and learning, 215 value, 295
national, 195, 271, 322 emergent strategy. See strategy
network, 88 emotional intelligence, 205, 351
organizational, 46, 49, 80, 101, 129, 220, 227, 230, 242, empowerment, 100, 155, 187, 331
253, 273, 317 enablers, 203, 260, 354, 357, 362, 366, 384
projects, 259, 331, 373 entrepreneurship, 57, 58, 138, 143, 250
societal, 226 ethics, 136, 191, 270, 273, 277, 285–293, 331, 383
trust, 275 evaluation, 40, 95, 99, 112, 134, 195, 222, 240,
customers, 14, 19, 21, 25, 27, 46, 49, 61, 77, 95, 98, 114, 176, 275, 287, 298
202, 216, 230, 275, 305, 331, 332, 345, 352, 361 exploitation, 62, 95, 101, 129, 328, 357–366
extra-productive behavior, 250, 257, 260, 262, 264
decentralization, 12, 15, 161
decision maker, 119, 123, 130, 285, 289, 290, 293, 297, 317, first-order economizing, 134, 143
354 front end, 19–30, 139, 230

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 388 Index

governability, 143 information, 215–234, 370

definitions, 141 gates, 363
devices, 143 leadership, 313
governance, 41, 73, 77, 89, 111, 134–144, 172, 195, network, 89
224, 232, 241, 285, 300, 303, 321, 327, 332, new forms, 371
333, 383, 384 sharing, 286, 305
approaches, 141 sources, 298
corporate, 134 stakeholders, 335
definitions, 76 innovation, 253, 259, 274, 275, 314, 320, 326, 328, 329, 332,
description, 143 338, 340, 358, 364, 365, 373, 375
functions, 85, 86 inspiring leadership, 38, 40
mechanisms, 129, 135 intangible resources, 49, 50, 52
monitoring and controlling, 111 integration, 9–16, 33, 59, 95, 107, 121, 200, 203, 207, 209,
processes, 116 219, 230, 239, 258, 272, 336, 384
program, 113 cohesion, 204, 256
structure, 78, 82, 83, 84, 135 coordination, 203
structures, 76 data, 362
government programs, 115, 116 HRM practices, 158
issues, 114 importance, 62
politics, 115 knowledge, 100, 274
group identification, 374 learning, 339
management, 110
hard systems, 237, 243, 321 mechanism, 12
healthcare, 119 mentoring model, 159
hierarchy, 10–13, 47, 83, 94, 140, 239, 242, 244, 336, 341 multilevel, 236
functional, 79 project management activities, 10, 55
of categories, 316 projects, 33, 40, 209
of needs, 189 SD, 326, 328, 330, 331, 333, 336, 339, 340
of projects, 330, 334, 335, 338, 340 system, 216
or network, 197, 336 team, 205, 207
organizational, 236 technologies, 116
high reliability organizations, 138, 140, 143 terminology, 10
historicities, 123, 129 integrative mechanism, 10, 13
HRM, 14 interfaces, 19, 75, 82, 89, 110, 122, 216, 218, 383
actors, 160, 166 inter-organizational projects, 14, 255, 275
allocation, 158 investment lifecycle, 333, 355
models, 153, 162 investor, 75, 90, 344, 355, 383
practices, 154, 158, 160, 163, 165 iron triangle, 24, 140, 240, 256, 262, 332, 340
processes, 154, 157, 160
project work environment, 163 knowledge, 234, 244, 254
roles, 159, 162, 166 flow, 262
selecting, 160 knowledge management, 14, 59, 62, 112, 151, 208, 219,
tasks, 161 274, 374, 376, 378
training activities, 156 new, 253
worker health, 164 services, 215, 218
human behavior, 251, 285, 292 sharing, 158, 205, 218, 253, 259, 262, 268, 274, 306, 358,
human capital, 153, 157 364, 376, 378
deployment, 157
development, 157 lateral organization, 12
theory, 164 leader intent, 186, 192
leadership, 14, 42, 186–197
improvising, 250, 256, 261, 262 distributed, 191
inconsistencies empowerment, 191, 193, 194
decisions, 295 enabling, 195
theoretical and practical, 311 exercising, 186, 191, 195
industry analysis, 49, 51 handover, 193
industry clusters, 268, 274, 276 horizontal, 186, 194, 195

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 Index 389

inspirational, 34 mission, 28, 46, 47, 51, 216, 222, 229, 230
interpersonal, 188, 195 mixed-methods, 35, 120, 130
monitoring and control, 193, 196 moral psychology, 285, 289, 290
practiced, 186, 192 morals, 285
processes, 191 motivation, 15, 161, 216
qualification, 192, 194 stakeholders, 174
relational, 190, 192 teams, 374
selection, 192, 194 multidimensional success, 41
vertical, 187, 190, 195, 251 multilevel
learning, 153, 215–234, 269, 272, 329, 335 organization, 295
competencies, 277 multi-methodology, 338
cross-project, 253, 359 multi-project management, 10, 62, 172, 181, 285
dynamic capability, 57, 58 multi-project organizations. See project-based organizations
emergence, 313 (PBO)
first-second order complexities, 138
network, 88 narrative, 252, 345, 349, 355
project success, 24 Navigation Wheel, 287
silos, 283, 357, 359, 361, 362, 363 network, 10, 13, 29, 55, 88, 181, 223, 252, 271, 275, 276, 296,
unlearning, 244 336, 376
value, 297 citizenship behavior, 259
lifecycle innovation, 206
benefits, 113 knowledge, 221, 230
management, 240, 299, 302, 332 leaders, 192
orientation, 333, 336 partners, 20
product or service, 26, 333, 358 project, 19, 21, 35, 76, 87, 253, 257, 259, 272, 299, 326,
program, 107, 111, 113 329, 332, 334, 335, 336, 364
project, 19, 36, 79, 95, 226, 272 stakeholders, 23, 24, 180, 182
project marketing, 352 network of projects. See network
stages, 138 networking, 63, 207, 230, 270, 274, 276
value, 20, 24, 25, 26, 30, 297
whole-of-lifecycle management of assets (WLMA), 299 open action strategies, 100
logic of appropriateness, 174, 179, 182 operational excellence, 34, 37, 38, 40
logic of consequentiality, 174, 181, 182 operational goals, 35, 36, 39
OPM
management of a group of multiple projects (MGMP). See contributions, 15
multi-project management definitions, 9, 10, 55, 62
management of multiple projects, 111, 129 descriptions, 1, 10, 62
market segmentation, 351, 354 evolution, 41
maturity model functions, 15, 203, 209
capability, 50 goal, 326
OPM 3, 44 links to DC. See dynamic capabilities (DC)
organizational project management, 330, 384 links to PPM, 62, 64, 92
SD, 332 links with value, 295
measurement, 40, 215–234 multilevel, 307
benefits, 113 nature, 13, 15
performance, 262 perspectives, 11, 15, 55, 61, 164, 172,
PPM success, 101 296, 306
process quality, 328 principles, 268
project success, 24, 101 OPM3, 44, 51, See maturity model
skills, 269 opportunity, 41, 173, 225, 261, 328, 334
value, 46, 305 to perform, 164
mentor, 159, 272, 273, 354 optimization, 26, 45, 286, 300, 384
metrics, 101, 111, 208, 219, 240, 302 value, 296, 307
microcosm, 12, 15 organization theory. See organization(al)
microfoundations, 58, 59, 63 theory
mindset, 141, 223, 244, 299 organization(al) theory, 9, 10, 11, 13, 45, 57, 119, 252, 311,
operational, 41 313, 384

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 390 Index

organizational personality, 188, 226, 244

capability, 55, 56, 57, 59, 233 leadership, 195
change, 106, 188, 236–246, 326 PMO (programs), 112, 115
citizenship behaviors, 164, 252, 257 PMO (projects), 122, 127
control, 23 design, 128
development, 153, 154, 237 diversity, 130
effectiveness, 13, 15, 100, 182, 200, 296 governance of networks, 88
hierarchy, 55, 62, 64, 215, 243 portfolio management, 76, 78, 85, 94, 98, 106, 136, 172, 223,
learning, 45, 63, 96, 205, 216, 226, 233 236, 237, 238, 244, 338, 353, 357, 358, See project
structure, 59, 60, 122, 124, 154, 161, 208, 251, 260, 271, portfolio management (PPM)
273, 357, 359, 365 portfolio of projects, 383, See project portfolio management
transformation, 120, 129, 242 (PPM)
organizational behavior, 227, 251, 263 power, 15, 49, 98, 112, 121, 123, 138, 173, 177, 181, 196,
theory, 164, 174, 182 203, 300, 307, 313, 321
organizational change, 218, 236, 317 principal, 77, 80, 81
organizational design, 9, 14, 119, 130, 331, 383 principle of equality, 287
definition, 119 process study, 119–131
diversity, 127 process theory, 123, 129, 130
perspectives, 120 productive behavior, 250–264
social aspects, 124 program
terms, 122 governance, 113
organizational project management. See OPM program management, 19, 84, 106–117, 237, 241, 244, 312,
organizational psychology, 164, 252, 262, 263 327
outcome, 34, 51, 62, 75, 77, 80, 93, 96, 111, 114, 116, 128, program(s)
135, 138, 141, 144, 163, 165, 172, 194, 222, 225, 226, manager, 111, 112, 114, 115, 186, 197, 203, 337
227, 261, 269, 270, 272, 273, 275, 276, 286, 287, 296, programs, 76, 106, 299, 315, 335, 338, 361, See government
297, 301, 303, 320, 322, 323, 328, 329, 337, 338, 345, programs
346, 347, 348, 355 benefits, 332
output, 50, 52, 75, 77, 80, 81, 83, 96, 111, 114, 175, 201, 210, coordination, 109, 115
237, 239, 241, 332, 336, 344, 345, 346, 347, 354, See definition, 107
control forms of, 109
governance, 110, See governance
paradigmatic incommensurability, 243 monitoring and controlling, 110
partnership, 88, 319 project
business, 144 business, 14, 19, 24, 26, 27, 29, 89, 353
public-private, 334 failures, 20, 106, 136, 139, 216, 315, 322
perceived fairness, 174, 179, 257, 259 lifecycle, 19, 26, 29, 33, 283, 297, 315, 337, 355
performance, 23, 24, 51, 223, 226, 227, 237, 251, 252, 259, marketing, 22, 83, 344–355
261, 269, 271, 273, 358 See governance, organizational personnel, 155, 158, 160, 162
effectiveness representatives, 173, 180
appraising, 160 results, 51, 95, 96, 240, 346
criteria, 116, 269 sponsorship, 78, 136
economic, 135 stakeholders, 181
evaluation, 116 strategy, 34, 36, 39, 42, 334, 336, 337
feedback, 377 success, 203, 204, 209, 250, 253, 271, 275, 300, 332, 338,
leadership, 192 373
long term, 138 teams, 14, 36, 111, 151, 200, 202, 203, 205, 211, 250, 254,
managing, 155, 156 261, 268, 306, 315, 322, 363, 365, 370
market, 101 project management
organizational, 10, 60, 164 activities, 10, 13, 14, 34, 62, 172, 181, 203, 204, 210, 285
PMO, 128 governance, 41, 84
programs, 110, 115 teams, 200, 301, See teams
projects, 10, 374 Project Management Office. See PMO (projects)
superior, 123 project portfolio management (PPM), 19, 24, 55, 62, 92, 268,
teams, 189, 200, 273, 376 295, 298, 304, 344
permanent organization, 11, 14, 75, 89, 157, 200, 272, 328, coordination, 95, 96
344 definitions, 174

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 Index 391

interactions, 111 managing uncertainty and risks, 138, 140

manager, 203 teams, 322
prioritization, 178 resource-based view, 10, 46, 49, 55, 164, 384
process, 95 resources/capabilities theory, 45
project stakeholder management. See stakeholders reviewability, 374, 375, 378
project-based organizations (PBO), 1, 10, 14, 24, 59, 62, 143, rich picture, 181, 182, 183
153, 164, 167, 172, 274, 358 risk management, 134, 135, 137
project-based work, 106, 163, 250, 252 best practice, 135
project-centric approach, 172, 179, 181, 182 governance, 144
projectification, 11, 92, 122, 251 second-order complexity approach, 138
projects traditional, 136, 137
monitoring and controlling, 23, 40
SD. See sustainable development (SD)
qualification, 100, 270 sensemaking, 124, 295, 304, 305, 307
quality improvement cycle, 44 service business, 26
service-dominant logic, 239, 296, 352
rational constructivism, 313 services, 19–30, 106, 119, 352
realization of benefits. See benefits shadows of the context, 180, 181, 182
reciprocity, 88, 259, 295, 377 shared space, 283, 357–366
reductionism, 179, 181, 182, 239 shareholders, 46, 51, 76, 77, 180, 296, 306, 332
reductionist, 134, 137, 179, 183, 239 social exchange theory, 257, 259
reflection, 127, 209, 224, 273, 276 social media, 48, 223, 230, 284, 320, 370–378, 383
reflective, 45, 175, 229, 278, 286 Social Network Analysis, 88, 255
reinforcing feedback loop. See reinforcing loop social skills, 276
reinforcing loop, 359 social systems, 93, 326, 328, 333, 339
relationships society, 12, 47, 120, 141, 226, 312, 332, 345, 373, 384
building, 352 soft systems, 181, 321
cause-effect, 137 SOPM, 33
collaborative, 142 sponsor, 29, 42, 78, 80, 90, 122, 139, 143, 202, 223, 253, 303,
controlling, 88 306, 337, 347
cross-functional, 207 stage-gate, 79, 86, 139, 142, 362
customers, 20, 27, 28 stakeholder-centric approach, 179, 181, 182
events and actors, 123 stakeholders, 77, 79, 172–183, 272, 285, 292, 298,
formal, 12 318, 321
governance, 77, 89 behavior, 173, 180, 182, 183
informal, 209 co-creating, 329
interdependencies, 298, 303 collaboration, 139
interorganizational, 262 communications, 110, 350, 351
leadership, 188 engagement, 78, 110, 115, 176, 240, 299, 329, 333, 344,
learning, 98 349, 350
maintaining, 370 governance, 80, 89
management and stakeholders, 76 integration, 95
networks, 22, 88 interaction, 332
partnership, 88 interests, 46
project personnel and career processes, 158 management, 14, 115, 172, 182, 272, 298, 335
project teams and OPM, 200 marketing, 344
projects and organization, 9, 62 multiple, 24, 30, 114, 285, 295, 296, 297, 304, 306, 334,
projects and portfolio, 63 347
roles and units, 11, 204 needs and expectations, 20, 30, 114, 230, 300
serving, 88 political, 115
‘sleeping’, 353 power, 303, 320
SPMM and project success, 35 relationships, 307
stakeholders, 272, 298 risk management, 135
trust, 260, 275, 370 roles, 175, 180, 238
virtual, 209 theory, 297
resilience value, 51, 295
attitudes and values, 226 steward, 81, 83, 90, 122

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 392 Index

strategic multicultural, 222

alignment, 40, 55, 62, 64, 95, 101, 172, 181, 236, 237, virtual, 200, 203, 207
241, 334 technical skills, 272, 276
asset, 55, 61, 62, 64 temporary organization, 11, 14, 15, 23, 45, 75, 80, 89,
control, 96, 99 122, 124, 154, 167, 190, 272, 318, 320, 328, 344, 370,
focus, 33–42 384
goals, 35, 36, 40, 51, 75, 92, 111, 113, 178, 285, communications, 370
304, 346 theory, 11
management, 33, 44, 45, 46, 47, 50, 51, 57, 92, 96, 272, traditional project management triangle. See iron triangle
274, 296, 334, 335, 358 traffic, 80, 319, 346, See urban design
project management, 36 transaction cost, 84, 88, 122, 143
value, 34, 36, 38, 40, 295, 301 transaction cost economics, 135
strategic management of projects, 33–42 transaction cost theory, 45, 121, 122, 130
Strategic Organizational Project Management (SOPM), 33 transactive memory, 60
Strategic Project Leadership, 36, 41 transparency, 94, 140, 159, 191, 196, 223, 286, 328, 335, 351,
strategy, 52 374, 375
deliberate, 46, 48, 51, 78, 93, 97, 101 trust, 79, 88, 152, 187, 191, 203, 205, 209, 223, 254,
emergent, 46, 48, 51, 52, 59, 93, 97, 101, 334 259, 260, 274, 303, 335, 354, 363, 370, 373,
formation, 92, 97, 98 374
formulation, 47, 93, 94, 96, 99, 334, See strategy:formation
implementation, 34, 92, 93, 96, 101, 313, 383 uncertainty, 241, 256, 292, 374
realized, 97 decision making behavior, 313, 316
unrealized, 93 high levels, 363
strategy-as-practice, 58, 59, 63 in project-based organizations, 164
structure management, 138
projects, 328 novelty, 162
structures, 134, 156, 203, 261, 262, 263, 334, 359 reducing, 138, 139
dynamic, 359 teams, 321
formal vs semi-formal, 260 technological, 358
informal, 276 university hospital, 120
lack of, 362 urban design, 284, 359, 360
management, 322 traffic, 357, 361, 365
operating, 271 user uptake, 240
social, 253 utilitarianism, 286
suppliers, 21, 28, 49, 77, 83, 115, 275, 299, 302, 331, 361
sustainability, 14, 24, 163, 223, 228, 326, 328, 332, 334, 339, value, 33, 47, 283, 304, 351, 354
383 business, 19
sustainable competitive advantage, 47 co-creation, 307
sustainable development (SD), 283, 326–341 concepts, 296
SWOT, 46, 49 creation, 28, 34, 283, 295–307, 326, 332, 337,
symbolic 383, 384
interactionism, 373 dependencies, 301
meanings, 371, 373, 377 economic, 49
objectives, 284, 374, 377 expectations, 295, 300
synergy, 11, 12, 111, 204, 210, 233 flow of, 97
generation, 20, 33
team interdependencies, 295, 300, 307
autonomy, 204 management of, 295
building, 162, 203, 204, 205, 273 maximization, 174, 295, 326, 359
dynamics, 204 moral, 288
effectiveness, 192, 200–210 network, 89, 175
teams, 200, 207 optimization, 24
co-located, 200, 207, 363 perspectives, 175, 295–307
cross-functional, 12, 15, 200, 204, 207, 272 proposition, 20
effectiveness, 34, 42, 190 sensemaking, 304
functional, 151, 200 shareholder, 364
integrated, 206, 207 stakeholders, 175

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statements, 46 volatile
symbolic, 371 environments or contexts, 283
value-centric, 296 volatile environments or contexts, 95, 217
virtue ethics, 287, 289 VRIN, 55, See resource-based view
vision, 222, 226, 227, 237, 240, 242, 243, 245, 270, 364 VRIO, 49, 51, 56, See resource-based view
voice, 100, 285, 291, 293, 305
voice behavior, 100, 257, 259, 263 wisdom, 215, 242, 273

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