Organizational enablers in project-based organizations

the case of project governance and governmentality

 

Sofia Pemsel, PhD, MSc

Copenhagen Business School, Department of Organization

Ralf Müller, DBA, MBA, PMP

BI Norwegian Business School, Department of Leadership & Organizational Behaviour

Jingting Shao, PhD, MSc

Chinese Academy of Social Sciences, Institute for Industrial Economics

Enablers of governance and governmentality in the realm of projects are a mystery. This study identifies organizational enablers (OEs) for governance and governmentality in the realm of projects in project-based organizations (PBOs). Our research design is a multiple case study with six firms in Sweden and China. Cases with distinct characteristics (size, degree of projectification, sector, and geographical location) were purposefully chosen to allow for identifying the widest number of possible enablers and their contexts to increase the likelihood of unpacking the mystery of what enables governance and governmentality in PBOs. By taking institutional theory as the theoretical perspective, we found that OEs are interwoven, albeit with different strengths, within the three pillars of institutional theory (the regulative, normative, and cultural-cognitive pillars). We found that OEs for project governance and governance of projects fall predominantly into the category of regulative and normative pillars, whereas OEs for governmentality belong mainly to the cultural-cognitive pillar of institutional theory. By analyzing the collective effects these enablers have in organizations, we found that they provide for an ambidexterity of flexibility and stability, which allows organizations to align their internal characteristics with their organizational context. Managerial and theoretical implications of the results are then discussed.

Keywords: project governance; governmentality; governance of projects; project-based organizations; organizational enablers

Introduction

Recent years show a steady growth of literature on governance in the realm of projects. Examples of the latest academic publications include the history and definitions of governance, as well as its positioning against the management of projects (Ahola, Ruuska, Artto, & Kujala, 2013; Too & Weaver, 2013). However, the latest practitioner literature addresses governance frameworks at various organizational levels (Dinsmore & Rocha, 2012). A common denominator across these branches of literature is the increasing awareness of diversity of governance approaches. Governance differs in many respects. For example, the governance of a single project differs from the governance of programs or portfolios (Müller, 2009), as well as in the attitude governors have toward people when implementing governance structures across organizations, from authoritative to more liberal or neo-liberal approaches to governmentality (Clegg, Pitsis, Rura-Polley, & Marosszeky, 2002).

While understanding about the nature and types of governance approaches grows, the particular aspects that enable them in different organizations have not been researched yet. Organizations are, therefore, not in a position to understand the breadth of governance approaches that can be enabled in their organization, the types of governance that fit their particularities, and how to adjust governance over time to organizational changes. Conversely, they do not know which characteristics they must instill in their organization to allow a particular governance approach to be implemented at any point in time. The present paper is the first to empirically address this phenomenon.

The theoretical perspective chosen is Institutional Theory, which addresses the processes by which social structures, including both normative and behavioral systems, are established, become stable, and undergo changes over time (Scott, 2012). It attempts to understand social structures by investigating similarities and differences in social settings, the relation between structure and behavior, the role of symbols in social life, the relationship between ideas and interests, and the tensions between freedom and order. The analysis levels range from the broader societal and institutional level, to the organizational and interpersonal relational level (Scott, 2004; Scott, 2012). Studies upon governance investigate conditions for ordered rule and collective action (Stoker, 1998) by addressing questions related to tensions between freedom and order, outcomes, and compliance to govern (for example, contractual hazards), and minimizing transaction costs. Studies on governance in the realm of projects focus on the roles and practices of institutions, such as steering committees and project management offices (PMOs) in organizations. Thus, an institutional perspective suits well to governance studies. For example, Henisz, Levitt, and Scott (2012), with feedback and support from, among others, Oliver Williamson, integrated the governance and institutional theory perspective into a conceptual framework for project governance in large infrastructure projects by extending and applying economic, legal, sociological, and psychological governance perspectives on relational contracts. Therefore, institutional theory provides an exceptionally good lens to look into governance. Aligned with Henisz, et al. (2012), we adopt the three pillars of institutional theory- regulative, normative, and cultural-cognitive-to explore how governance and governmentality initiatives are enabled in PBOs.

The context of the study is PBOs. PBOs use projects as a way of doing business (Whittington, Pettigrew, Peck, Fenton, & Conyon, 1999). Thus, these firms acknowledge project work and carry out most of their activities in projects (Lindkvist, 2004), as well as in organizations that use projects as a strategic means for differentiation. The PBO may be a stand-alone organization or a subsidiary of a larger corporation (Turner & Keegan, 2001), or is sometimes interwoven in complex post-bureaucratic organizational structures (Josserand, Teo & Clegg, 2006). Characteristics of PBOs stem from the temporality of projects being the building blocks of their business and their impact on various organizational elements such as structure, structural complexity, and difficulties in learning (Lindkvist, 2004; Soderlund, 2008). One of the main characteristics of PBOs is the “contextual embeddedness of temporary systems in the more permanent” contexts (Sydow,Lindkvist, & DeFillippi , 2004, p. 1477) which give rise to internal tensions between temporary projects and the permanent organization due to, for instance, different goal and time perceptions (Bredin & Soderlund, 2011). This, in turn, results in various managerial and governance complexities for the PBO (Bredin & Soderlund, 2011; Davies, Gann, & Douglas, 2009). This complex organizational setting, characterized by coordination difficulties through its projects, often goes beyond the PBO to its institutional surrounding (or system) and creates internal tensions among institutions and individuals. This calls for a broader, more integrative view of the PBO to understand how governance and governmentality are enabled.

The purpose of this paper is to unpack the mystery of what the OEs are for governance and governmentality in the realm of projects in PBOs. We investigate which OEs allow for governance and governmentality of projects in PBOs from a regulative, normative, and cultural- cognitive perspective. Our research question is:

RQ: What enables governance and governmentality of projects in project-based organizations?

More specifically, we focus on OEs that legitimize and allow for project governance, governance of projects, and governmentality in PBOs. The unit of analysis is the PBO. The present study adopts a critical realism approach and investigates OEs for governance and governmentality of projects in PBOs through a multiple case design comprising three cases in China and three in Sweden. The cases represent large, medium, and small sized PBOs for each respective country. The study provides insight into the geographic, sectorial, and organizational differences in enablers of governance and governmentality. To that end, it helps academics to develop or refine their understanding and theories about the antecedents of different governance structures. It also helps practitioners to adjust either the preconditions for desired governance structures or evaluate the feasibility of implementing a particular governance structure in a given organization.

The next section, a Literature Review, identifies the nature of OEs through the theoretical lens of institutional theory and introduces the concepts of project governance, governance of projects, and governmentality. Thereafter follows the methodology, the analysis results, and theory development. Finally, conclusions are drawn and managerial and theoretical implications are presented.

Literature Review

Three Institutional Pillars of Project-Based Organizations

Institutional theory defines regulative, normative, and cultural-cognitive elements as a means to understand stability and meaning of social life in organizations (Scott, 2004). Institutions are made up of actors (individuals and organizations) and become real when materialized in practice (i.e. through social behavior) (Scott, 2012). Regulative elements comprise formal regulations such as laws, and property rights (Scott, 2004; Henisz et al., 2012) that are often externally set to an organization (like a PBO). Regulative elements are materialized through relational contracts, public-private partnership, adjustment to environmental laws, etc. Normative elements involve informal norms, values, standards, and roles. In PBOs, this relates to, for example, standards provided by professional associations such as the Project Management Institute (PMI®) or the International Standardization Organization (ISO), and project management methodologies internally developed by organizations. It further involves internal peer-pressures to achieve alignments of behaviors through formal mentoring, training, and informal interactions. Cultural-cognitive elements comprise shared beliefs, symbols, identities, and logics of action (Misangyi, Weaver, & Elms, 2008; Orr & Scott, 2008; Scott 2012). For example, it includes organizations that identify with a certain occupation, professional or personal network, or organization (Grabher, 2004), and believe in practices through association with quality of craft (Thornton, Ocasio, & Lounsbury, 2012).

Organizational Enablers

The literature on OEs is rather immature and not fully aligned concerning its definition and scope of the term “enabler”. In an earlier conceptual study, the authors developed a framework for assessing enablers, based on the work by Maitlis and Lawrence (2007) who investigated conditions that trigger and enable sense-giving in organizations (Müller, Pemsel, & Shao, 2014). In their analysis, Maitlis and Lawrence suggest that enablers involve two parts: discursive abilities of organizational actors (the ability to construct and articulate persuasive accounts of the world), and organizational process facilitators (routines, practices, and performance). Both need to coexist to turn an organizational capacity into an enabler. The relationship between these elements is not a simple one in organizational settings, as context, timing, and organizational complexity impact the power of these elements in support of a particular enabler (Seddon, Calert, & Yang, 2011; Gulati, Sytch, & Tatarynowicz, 2012). The earlier paper by the authors (Müller, Pemsel & Shao, 2014) revealed that each of the two enabler elements (process facilitator and discursive ability) consists of two parts: factors and mechanisms. Process facilitator factors involve touchable characteristics, conditions, and variables directly impacting the effectiveness, efficiency, and viability of governance. Process facilitator mechanisms trigger or accumulate actions in order to increase the likelihood of a certain outcome, such as structures or rules. Discursive abilities factors involve communicative and interactional characteristics that impact the mentality and attitudes of people. Related discursive abilities mechanisms are structures supporting discourse, such as synchronized communication structures, dedicated network structures, etc.

As Scott (2012) advocates that the three pillars of institution coexist in the social structure, we argue that discursive abilities and process facilitators of OEs are interwoven within the three institutional pillars. For example, regulations and policies (as process facilitator factors) fall into the category of the regulative pillar. Shared beliefs are discursive abilities mechanisms and belong to the cultural-cognitive pillar. Table 1 shows examples of the mapping of process facilitators and discursive abilities against the three institutional pillars.

Examples of mapping OEs and pillars

Table 1. Examples of mapping OEs and pillars

Project Governance, Governance of Projects, and Governmentality

Governance theory comprises mainly of two components, the Institutions, which shape the context within which actors' behavior occurs, and the Actors, with their individual perspectives and meanings (cultural-cognitive elements). In the realm of projects, the governance literature mainly addresses institutions and their related roles, responsibilities, and practices (i.e. mainly regulative and normative elements). Little is published on people and the way they are steered through governmentality, or even the integration of governance and governmentality. This will be addressed in the present paper.

We argue that enablers of governance in the realm of projects in PBOs needs to be addressed from three distinct perspectives: project governance, that is, governance of individual projects (Müller, 2009; Project Management Institute, 2013a), governance of projects, that is, governance of groups of projects, such as portfolios (Williams, Klakegg, Magnussen, & Glasspool, 2010), and governmentality, that is, they way to govern (Foucault, 1991). We believe this is critical, as governance theories mainly focus upon institutions and policies (the regulative and normative elements), which are collective and macro-level constructs and behaviors, which to a large degree, ignore the micro-practices and micro-sites (the cultural-cognitive and partly normative elements). In order to provide a more critical view of how organizations are steered, the necessity of understanding how individuals think about governance and how power functions by making individuals willingly complicit in their governance has been stressed through the introduction of governmentality theory (Bevir, 2011; Merlingen, 2011; Ove, 2013).

The word “governmentality” is a merger between governance and mentality (i.e. a particular way of thinking), and refers to, for instance, whether the governance is enforced through soft cultural values or strict rules (Clegg, Pitsis, Rura-Polley, & Marosszeky, 2002). Foucault (1991) positions governmentality as the link between governance of individuals, families, and state. In an organizational context this refers to the different types of governance at the level of projects and groups of projects, and governmentality as the link between them. Therefore, governance shall not be discussed without governmentality as its integrating concept. However, due to the nature of its role as a link (and thus an entity in itself), governmentality shall not be broken further into project governmentality and, for example, program governmentality.

The understanding of governance in the literature is further complicated through different perspectives taken by different authors. Examples include methodology-oriented literature on governance which takes a more technical perspective by normatively defining processes, milestones, planning, and control mechanisms for projects or groups thereof (Office of Government Commerce, 2009; Project Management Institute, 2013b). Another perspective is taken by more sociological writers, who emphasize the execution of power through governance structures and governmentality approaches (Clegg et al., 2002). This differs from publications that take an organizational theory or organizational development perspective, which typically emphasize the role of values and the need for flexibility in both organization structures as well as individuals' roles in these structures (Association of Project Management, 2004; Foss, 2012). The present paper belongs to the latter category.

Organizational Enablers for Project Governance

Academic literature in this domain indicates that the establishment of execution authority for project governance (supported by an existing infrastructure as an enabling mechanism) is a major enabler for project governance. Examples include the broker-steward model as described by (Turner & Keegan, 1999, 2001).

This enabler includes the factors of process facilitators, such as policies, governance institutions, adaptable organization structures, governance frameworks to implement and govern projects (Miller & Hobbs, 2005; Turner & Keegan, 1999; Williams et al., 2010), and mechanisms that support flexibility in both adaptation of organization structures and application of different governance frameworks (Klakegg & Haavaldsen, 2011; Renz, 2007; Turner & Keegan, 2001) to align business requirements with project needs.

Factors allowing for the discursive abilities of this enabler are the alignment of and communication between the strategy, governance, and projects in the organization (Morris & Jamieson, 2005; Turner & Müller, 2004) supported through mechanisms such as steering committee meetings, workshops for information gathering and exchange, ideating, planning, and review (Crawford et al., 2008; Lehtonen & Martinsuo, 2008). Proposition 1 provides an abstraction of the organizational enabler for project governance.

Proposition 1: Organizational enablers for project governance are the authority to procure, implement, and execute governance frameworks and policies, and the presence of specialized project governance roles.

Organizational Enablers for Governance of Projects

This domain of literature mainly addresses the need for flexibility in governance structures required for the alignment of project and organizational needs, such as different governance approaches, organization structures, and stakeholder management approaches to accommodate goal accomplishment for programs and portfolios, while simultaneously aiming for manageable levels of standardization across projects (Aubry, Sicotte, Drouin, Vidot-Delerue, & Besner, 2012; Blomquist & Müller, 2006).

Process facilitators for governance of projects include factors such as versatile organization and institutional structures, as well as their deployment, such as PMOs, middle manager involvement, presence of project management methodologies, and governance frameworks (Aubry, Hobbs, & Müller, 2010; Blomquist & Müller, 2006; Turner & Keegan, 1999). Related mechanisms include the fostering of adaptive capabilities of the organization, hybrid organization structures, flexible mandates, roles of individuals and institutions (Aubry et al., 2012; Foss, 2012; Williams et al., 2010), willingness to collaborate across organizational boundaries, and standardized, but flexible project management approaches across the organization.

Factors underlying the discursive abilities are people's awareness of organizational project management, its institutions and roles, presence and communication of governance policies, and governance goals (Aubry et al., 2012; Müller, 2009; Pemsel & Müller, 2012). Mechanisms underlying the discursive abilities include events for knowledge exchange (e.g. program and portfolio level meetings for synchronization of governance across projects), PMO networks, communities of practice, and structures that allow for ambassadorial and boundary spanning activities (Aubry, Müller, & Gluckler, 2011; Lehtonen & Martinsuo, 2009; Müller, Gluckler, Aubry, & Shao, 2013), and the flexible adjustment of mandates and roles of governance institutions and individuals to achieve the goals of the organization through projects. To summarize the elements of OEs for governance of projects, we propose that:

Proposition 2: Organizational enablers for governance of projects are flexibility in structures and interactions, which allows for effectiveness in project selection and efficiency in project execution.

Organizational Enablers for Governmentality

The literature in this domain emphasizes the development of people and their mentality, which allows them to think organization-wide and make flexible use of existing structures. Especially emphasized is the need for people's mindfulness of the wider organization in their decision making, their awareness of and willingness to take on responsibility for tasks and results, as well as their willingness to self-organize their work within and across projects (Bresnen, Goussevskaia, & Swan, 2004; Foss, 2012; Lindkvist, 2004).

Facilitators of this process are factors such as decentralization and autonomy in distributed work practices, presence of top management support, and appropriate roles of governance institutions, such as PMOs (Bresnen et al., 2004; Crawford et al., 2008; Müller, Gluckler et al., 2013). Mechanisms that support these process facilitators are flat organization structures, combinations of formal and informal roles, and building of trust between individuals and the governance structure (Crawford et al., 2008; Lindkvist, 2004; Müller, Andersen et al., 2013).

Factors in support of discursive abilities are people's awareness about the temporality of projects and the associated emphasis on short-term performance, plus the alignment of project level and corporate level governance through discourse. Furthermore, a culture of shared ideology, which gives meaning to the project and allows for fruitful discussions (Franck & Jungwirth, 2003; Lehtonen & Martinsuo, 2008). Related mechanisms include synchronized reporting practices across projects and organizations, networks of people as “knowledge containers”, and shared communicative events, both internal and external to the organization (Bresnen & Fowler, 1994; Clegg et al., 2002; Lindkvist, 2004). Based on the above analyses, we propose that:

Proposition 3: Organizational enablers for governmentality provide for the development of individuals that are mindful of the organization, self-responsible, and self-organizing to a degree that matches the goals of the corporation.

This review showed a knowledge gap in terms of the understanding of the nature and role of OEs for governance in the realm of projects. This gap will be empirically addressed throughout this paper.

Methodology

This study uses a “realist” approach in the sense of Bhaskar (1975) by combining the robustness of positivistic, deductive approaches for the development of an inventory of governance approaches as “underlying mechanics” and input for the more phenomenological levels of “situation” and “experience” as defined in Bhaskar (1975), to explore OEs for governance in the realm of projects. This, together with the replication logic of a multiple case study design, is an appropriate perspective for the assessment of new phenomena (Chia, 2013; Saunders, Lewis, & Thornhill, 2007; Yin, 2009). Within this philosophical perspective, we used a deductive approach to test the input variables and an abductive approach as described by Alvesson and Sköldberg (2009) to develop a model of governance in the realm of projects. This allowed us to go back and forth between deduction and induction by alternating between existing theories, the researchers' existing frameworks, and empirical data, to understand the life-world of informants through sense-making of their meaning and reasoning in context.

The research was done in two stages. In stage one, template analysis (King, 2004; Saunders et al., 2007) was used to deductively test the propositions, which provided an inventory of governance elements at the level of individual projects, groups of projects, and governmentality. Template analysis is a deductive method to test for the presence of theoretically derived patterns (like the proposed OEs) in a given text, and allows for complementing, integrating, or expanding these patterns with new ones found in the text. The narratives of the case companies were used as input text for coding and testing, and also development of more detailed governance elements. This result informed the second stage, theory development.

Alvesson and his two colleagues' non-traditional and reflexive method, known as mystery construction, was used for stage two. This method was applied to project governance phenomena before, for example, in (Müller, Andersen et al., 2013). The mystery construction method recognizes the socially constructed nature of empirical material and integrates it with the existing frameworks of researchers, their pre-understandings, and vocabularies, in order to create a particular understanding of phenomena that are not yet adequately explained by existing literature. The first step in the two-step method identifies the phenomenon to be investigated, and the application of an established interpretive rule (theory), which is applied to reflect on the empirical phenomenon together with the researcher's background knowledge and experience. The second step solves the mystery through reflexive reasoning. Reflexion is hereby understood as the first reflection of each researcher on the phenomenon in light of existing theoretical frameworks, and second, to jointly reflect on each researcher's first reflections (Alvesson & Karreman, 2007; Alvesson & Sköldberg, 2009). The method is deliberately held subjective, as subjectivity “should be reflexively and self-critically cultivated and mobilized, reinforcing the ability to discover interesting research issues” (Alvesson & Karreman, 2007, p. 1268). With multiple researchers doing this together, the process ends with the articulation of a new, jointly developed interpretive rule (theory) (Alvesson & Karreman, 2007). This step followed Foucault's (1972) process for discourse which requires accomplishment of four sequential milestones which are positivity (pattern statements emergence), epistemologization (statements verification for knowledge development), scientificity (knowledge assessment for scientific validity), and finally, formalization (theory formulation). Results from this stage constitute the final model in this paper.

Research Design

A multiple case design was chosen with six PBOs of different sizes, sectors, and geographies. We followed the EU Commission Recommendation for the definition of small and medium size enterprises (European Union, 2003), which define companies with less than 50 employees as small, and less than 250 employees as medium. Accordingly, we categorized companies with more than 250 employees as large, and sampled for the countries of Sweden and China:

  • A small consulting company in the field of project management with less than 50 employees
  • A medium-size engineering company with 50 to 250 employees
  • A large-size pharmaceutical company with more than 250 employees

To identify the widest range of enablers, we sampled for a) geographical/cultural differences by having similar organizations, but different countries in each size category (small, medium, large) and b) different sizes and industries.

Data collection was done through 31 semi-structured interviews, plus inspection of materials such as templates, reports, process descriptions, and published material, such as a book on organizational transformation toward project-based organizing, authored by the PMO of one of the case companies and describing their transformation process. To avoid blurring the results through a too-wide span of roles, the interviews were held with project managers and direct managers of project managers, with the latter group covering roles such as CEOs in small companies, or directors in medium and large organizations. All interviews were tape-recorded and all but two interviews were held face-to-face by a team of two researchers, where one took notes, while the other engaged in dialog with the interviewee. The two exceptional interviews were held via Skype. Theoretical sampling was used until theoretical saturation was accomplished (Saunders et al., 2007). The characteristics of the six cases are summarized in Table 2. A brief description of the six case companies is presented in the appendix.

The semi-structured interviews followed Silverman (2010, p. 47) by being a “part of the process through which a narrative is collectively assembled”. A narrative for each case company was developed from that basis.

Within-case analysis was done first, followed by cross-case analysis. This was done by the researchers in analysis workshops, which helped to identify underlying patterns in the form of general and context-specific observations and their interpretations. This second step in Alvesson & Karreman's (2007) approach allowed for sense-making of the variety of phenomena reported by the interviewees.

Summary of the main characteristics of the six cases

Table 2: Summary of the main characteristics of the six cases

Validity and Reliability

Validity and reliability was addressed using Yin's suggestions (2009) for multi-case studies. Here, construct validity was addressed through multiple sources of evidence, selection of best informants possible, as well as the researchers' development of an agreed-upon narrative for each case company. Internal validity was achieved through pattern-matching using template analysis, and external validity through replication logic in multiple cases. Reliability was achieved through a case study protocol, which was developed upfront and used by all researchers in all interviews and cross-case validation of analysis findings.

Ethical approval for the study was obtained from the country government of the leading research institution in this study. Interviews started with careful explanation of the study, the rights of the interviewee, and the ways personal data are handled in the analysis, in order to achieve interviewees' informed consent.

Research Findings

Within Case Analyses Results

We first analyzed the narratives for each company trying to identify the codes (as suggested by Silverman (2010)) for OEs of each governance type (i.e. project governance, governance of projects, and governmentality). The purpose was to identify evidence in testing the three propositions by comparing the codes we identified with the elements of each proposition. As we were looking for the diversity of governance elements and not their intensity, we applied a quantitative analysis of the qualitative data, following (Cameron & Sankaran, 2013; Silverman, 2010).

We found that the codes generated from each case narrative were largely overlapping with the elements of OEs for project governance. Thus, proposition 1 is supported through all cases. For proposition 2, codes generated from four companies (companies A, B, C, & F) showed commonality with the elements of OEs for governance of projects, and codes from the other two companies (companies D & E) showed a moderate fit with the elements of OEs for governance of projects. The latter because little communication was found across projects in companies D and E, which is contradictory with the element of synchronized governance across projects in the OEs for governance of projects. We concluded that proposition 2 is also supported. As for proposition 3, codes generated from companies A, B, C, and F present, to a large degree, an overlap with the elements of OEs for governmentality. However, codes from companies D and E poorly overlap with the elements of OEs for governmentality, because the major emphasis of governmentality is about the project-thinking culture, open discourses, and autonomy of project managers. Company D with a “directive” working style and company E with a lack of project- thinking culture, represent a less liberal and more rigid governmentality than proposed in proposition 3. Therefore, we claim that proposition 3 is only partially supported. It is indicated that governmentality is contingent on context and ranges from liberal to rigid approaches.

To conclude the results of the three propositions testing, we found that OEs enable the execution of project governance, governance of projects, and governmentality.

Cross-case Analyses Results

We further analyzed the codes across the six cases. For OEs for project governance, we found the following keywords and their frequency (see Table 3): methodology, meetings, steering committee (in all cases), flexible organizational structure (five times in six cases), top management support (four times), as well as Project Management Office (PMO), and clearly defined roles (two times respectively, and both in large companies). We compared these keywords with the three pillars of institutional theory and found that these common OEs for project governance predominantly reflect the regulative and normative pillars of institutions. To conclude, the pattern emerging here is:

OEs for project governance include the existence of methodologies, meetings, steering committees, flexible organizational structures, and top management support. Particularly for large companies are PMOs and clearly defined roles.

We continued analyzing the codes across the six cases on governance of projects. We found that keywords (Table 3) like company-wide methodology (five times), flexibility in structure, standards, communication media (either meetings or IT infrastructure), and alignment of projects with business needs (four times respectively) appeared frequently. By comparing these keywords with the three pillars of institutional theory, we found that they predominantly fall into the categories of regulative and normative pillars. In summary, the emerging pattern for governance of projects is:

OEs for governance of projects include existence of company-wide methodology, flexibility in structures, standards, communication media, and alignment of projects with business needs.

In the end, we analyzed the codes on governmentality across the six cases. Frequently appearing keywords (Table 3) included: open system, project autonomy, taking responsibility (four times), and project-thinking (two times in companies A and F, the two companies with the strongest project culture among the case companies). We then compared these keywords with the three pillars of institutional theory and found that they predominantly relate to the cultural- cognitive pillar. For example, when “open system” referred to the cognitive aspects of good understanding of the entire organization. To sum up, the pattern emerging for governmentality is:

OEs for governmentality include people's perception of the organization as an open system, as well as project autonomy, and taking responsibility. In particular for companies with a strong project culture, is that project-thinking enables governmentality.

Furthermore we found that people's willingness and motivation to engage in sense-making activities is a crucial element of OEs across all levels.

We then analyzed the emergent patterns against the institutional theory. Table 3 summarizes the relationship between these patterns and the three pillars of the institutional theory.

Mapping the research findings against the three pillars of institutional theory

Table 3: Mapping the research findings against the three pillars of institutional theory

These OEs represent the visible or measurable expressions of governance and governmentality in organizations. Their levels of expression within an organization are the individual “symptoms” of an organization's governance. They do not tell directly how the individual “symptoms” work collectively for governance in organizations. Just as high levels of control and formal reporting (as symptoms) do not tell directly how they combine to fulfill the aims of an organization.

Therefore, the next stage in the analysis was to identify the collective work of the OEs shown in Table 3 in order to model governance in the realm of projects at the organizational level.

Modeling Governance in the Realm of Projects

Findings in Table 3 informed the model development where we used the two step process of Alvesson and Sköldberg (2009) to develop the model of OE characteristics.

This phase identified three characteristics of OEs for governance in the realm of projects. These are (see also Table 4):

  • Flexibility: the ability to adapt to changing requirements. The nature of flexibility differs with the level of governance.
    • Project governance emphasizes methodological flexibility. In paraphrasing Shenhar (2001), this means “one-size [of methodology] does not fit all [projects]”. The governance structures must allow for adjusting project governance, including the methodology, to the projects' needs.
    • Governance of projects emphasizes structural flexibility, whereby organizations adjust their structures to the importance and the scope of their projects, such as “safeguarding” strategic and long-term projects from short-term profitability judgments and executing them within other organizational structures than the day-to-day projects (i.e. elsewhere in the organization). Other examples include the use of company-wide methodologies, which, at their aggregate level provide different governance approaches for different groups of projects, such as different portfolios or programs of projects
    • Governmentality emphasizes cognitive flexibility. That is, the ability to address micro and macro levels simultaneously, such as in prioritization of tasks or resources in light of the different requirements stemming from the project at hand, other projects in the portfolio, and the wider organization. Likewise, it involves an individual's flexibility in sense-making of own and organization-wide capabilities before accepting responsibilities for themselves and others
  • Stability: an antecedent of flexibility at any level is the stability of the elements of the next lower level. The balance of stability and flexibility represents an organizational ambidexterity, similar to exploration and exploitation (O'Reilly & Tushman, 2004; Raisch & Birkinshaw, 2008), in which the co-existence of both elements is decisive for long-term efficiency of the organization. The nature of stability differs. Therefore, flexibility in:
    • Project governance builds on stability in ways to manage individual projects, such as proven methodologies with proven processes, tools, techniques, roles, and responsibilities, which can be adjusted when needed at lower risk for the project than instable ad-hoc practices. Thus, methodological flexibility as described above should be based on stable practices within the methodologies.
    • Governance of projects builds on the stability of the framework of corporate-wide methods and standardization. Here, too, the stability provided by, for example, standardized reporting across projects or limitations in the choice of methods to be used reduces risks when the need for flexibility arises, such as after reorganizations or redesign of project portfolios, or in integrating projects for new markets into existing portfolios.
    • Governmentality builds on stability in the underlying understanding of the wider organization. Cognitive flexibility, as described above, requires a stable understanding or model of the organization, such as a systems view on how it works, its capabilities, resources, and their availability, in order to respond appropriately, for example, to newly upcoming business opportunities.
  • Alignment: the ability to synchronize and possibly synergize the choices in governance structures and governmentality with the organization's internal characteristics (such as organization structures, skill sets, and overall culture) and the characteristics of its context. This includes for:
    • Project governance: its alignment with the nature of the project. Examples include flexible and more outcome-focused governance structures in innovation projects which require freedom and “out of the box” thinking of project teams (March, 2007) compared to more rigid governance structures, which enforce process compliance in projects with well understood means-ends relationships, such as maintenance projects.
    • Governance of projects: its alignment with organizational strategy, markets, and corporate governance. Examples include the alignment of the portfolio governance approach. For example, its reporting and selection criteria, to the changing strategy of the organization. Similarly, the alignment of portfolio, program, or board-level, company-wide project activities to changes in markets or corporate governance structures (e.g. adjusting to new or changing contracting policies).
    • Governmentality: its alignment with organizational structures and cultures in order to avoid a mismatch between formal structures and people's behavior. Examples include neo-liberal governmentality approaches in flat and flexible organization structures, and more “command and control” governmentality in hierarchical and bureaucratic organizations.

Table 4 summarizes the characteristics of the model derived from the study.

Characteristics of OEs

Table 4: Characteristics of OEs

The model in Figure 1 is derived from the researchers' understanding of the interrelationship of the dimensions:

Stability in underlying dimensions is an antecedent of efficiency in flexibility for any of the three levels of governance. However, this stability is not static, it changes over time as understanding of the underlying dimensions evolve, such as in the emergence of new or better practices for planning or reporting in project governance.

This allows for a variety of interpretations, one being that the ambidexterity of stability and flexibility create a punctuated equilibrium in the sense of Gersick (1991) (where longer periods of stability alternate with shorter periods of change), by alternating between stable states, where flexibility can be applied due to stability, and change states (when flexibility should not be applied because the underlying elements are under reconfiguration). During stable states, stability and flexibility jointly allow for the adjustment of governance and governmentality in organizations to its context, such as organization structures, markets, or strategies. Another interpretation may be along the thoughts of Farjoun (2010) who sees stability and flexibility as continuously reinforcing each other, thus as constantly changing, and governance being permanently adjusted. The need for further research to address these perspectives in the realm of projects and their governance is indicated.

Among the three dimensions, flexibility emerges as the most important dimension, as it links the practices and skills of the organization with its internal structures and its environment. The reason why flexibility is vital for enabling governance in PBOs may be related to the fact that PBOs deal with projects. Due to the interdisciplinary (and sometimes inter-organizational nature of projects), the project actors become carriers of different institutions (Scott, 2012). The actors will so be exposed to multiple, sometimes conflicting, institutional demands. Each institutional demand includes specific regulatory regimes, normative orders, and cultural-cognitive logics (Friedland & Alford, 1991; Pache & Santos, 2010; Scott, 2012). The pressures put on actors operating under multiple institutional demands, limited time, and resources may give rise to institutional exceptions in projects (Orr & Scott, 2008) as a means to manage the multiple pressures and demands. The PBO, as a holder of multiple projects, thereby needs to find equilibriums where the projects and their actors are allowed to perform their specific missions under specific institutional demands. The PBO might even be allowed to create institutional exceptions that slightly drift away from its dominating institutional order, and yet align the project and business objectives. PBOs are, as our study demonstrates, complex entities as they involve multiple institutional orders and operate under multiple institutional demands at various levels. For example, the regulative elements (laws, formal regulations, etc.) in a pharmaceutical PBO differ for drug development projects and business improvement projects, where the former are exposed to more external, as well as internal controls and regulations. This, in turn, impacts the normative elements (standards, roles, conventions, practices, etc.) that are appropriate for each project type and so the nature and importance of different cultural-cognitive elements (shared beliefs, identities, logics of actions, etc.). Moreover, the medium and large companies in our study are global actors, putting additional institutional pressures upon the project actors through new sets of institutional demands and thus, put additional pressures upon the PBO's governance system. OEs in PBOs are characterized by ongoing negotiations between stability, flexibility, and alignment-concerning process-facilitating, as well as discursive ability dimensions, which jointly allow the governance and governmentality of projects to prosper in PBOs.

Model of OEs' characteristics

Figure 1: Model of OEs' characteristics

Conclusions

This study aimed to solve the mystery of OEs for governance and governmentality in the realm of projects in PBOs. A multiple case design was adopted to test three theoretically derived propositions on governance of individual projects, groups of projects, and the governmentality in project-based organizations. The propositions were supported, showing that governance and governmentality constitute of normative, regulative, and cultural-cognitive elements, thus can be understood from an institutional theory perspective. The emphasis varies, with normative and regulative elements being dominant in the two governance levels of project governance and governance of projects. Whereas, the cultural-cognitive elements dominate in governmentality, which can be explained by the structural nature of the former and the more psychological nature of the latter (see Table 3).

The research question asked what enables governance and governmentality of projects in project-based organizations. This can be answered now.

This study identified 16 OEs, of three different natures (regulative, normative, and cultural- cognitive), which work at three levels (project governance, governance of projects, and governmentality). They are listed in Table 3. Proposition 1 (see above) was supported. Project governance is enabled through regulative OEs, such as institutions (PMOs, Steering Committees) and the mechanisms that allow them to perform, such as flat organization structures; normative OEs, such as the presence and authority to use project methodologies and clearly defined roles, which both provide for structured work; and cultural-cognitive OEs, such as meeting schedules that allow for sense-making through information exchange across project and organizational boundaries and top management support for prioritization of efforts. Governance of projects is enabled in line with the supported Proposition 2 (see above). The related regulative OEs are standardization of work across projects, together with related enabling mechanisms like media and infrastructure, and flexible organization structures. Normative OEs include the structural elements of company-wide project methodologies. Cultural-cognitive OEs include sense-making elements like the alignment of projects and business. Governmentality is indicated to range from strict to liberal, as shown by the partial support for Proposition 3. Regulative OEs for governmentality include: autonomy of project managers to provide them with the required mental “room to maneuver” to manage their projects themselves; normative OEs such as allowing for self-responsibility to perform in line with professional standards; and cultural-cognitive OEs that facilitate thinking in projects and seeing the enterprise as an open system to become aware of strengths, but also limitations, in terms of what can be done in an organization. These are the observable patterns of OEs.

The collective work of these observable OEs for the accomplishment of organizational level objectives are shown in Table 4 and Figure 1. A key feature of the collective effect created by the governance elements is to achieve organizational flexibility. This flexibility, which is differently expressed at the different levels of governance and governmentality, allows to align the internal characteristics (such as organization structure, people, and capabilities) with the characteristics of the organization's environment (such as markets or sectors), through adaptation of the governance structure. However, flexibility should be achieved at low risk of failure and, therefore, be accomplished through use or modification of proven and established work and organizational practices, not through ad-hoc activities (as shown in organizational maturity models, such as the Capability Maturity Model Integration (CMMI)). These proven practices constitute stability underlying or antecedent to the flexibility required for the alignment of internal structures, external environment, and governance structure.

Managerial implications of the findings include indicators about implementable OEs at the different levels of governance, as shown in Table 3, and their contribution to the alignment of internal and external structures through flexibility in governance. For example, the development of methodology frameworks for project managers to choose from contributes to flexibility at the project level and alignment of organizational project management capabilities within the organization's environment. Similar examples hold for governance of projects and governmentality.

Theoretical implications include the contribution to an organizational theory on governance in the realm of projects, as shown by the model in Figure 1. As the first study addressing the commonality of governance and governmentality in the realm of projects shows, we proposed one possible model, which should be tested with larger samples and in different contexts. Future research should also test the validity of the OEs as shown in Table 3 and the theory about governance shown in Table 4 and Figure 1, in order to validate, expand, or modify it.

The strength of the study lies in the deductive nature of the development of OEs, which found both theoretical and empirical support in a multi-case research design. Thus, it contributed to theoretical generalization as defined by Yin (2009). Limitations are in the small sample size, which does not allow for statistical generalization of the study findings, and the subjective nature of the findings, which should be tested in a more objective, preferably quantitative manner.

This study's contribution to knowledge lies in the empirically validated and theoretically structured inventory, as well as in the development of a first theory on the collective work of governance and governmentality in the realm of projects and in PBOs.

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Appendix

Sweden Small (Company A)

Company A is a small, project management training and consulting organization with 11 employees. Their aim is to provide training courses and project management services to customers, as well as supporting customers' development of project maturity and project competence. All activities, except the provision of standard training courses, are seen as projects. Seventy percent of the revenue stems from project management services for clients, 15% from project maturity assignments, and 15% from courses. The consultants are all employed by the company, but not everyone is a shareholder.

Sweden Medium (Company B)

Company B is a 50-employee, autonomous organization, linked to a larger conglomerate, with which they do not share business, practices, or employees. The company operates in Sweden, Canada, Brazil, and Norway. The company develops, installs, and maintains IT solutions for large clients worldwide. About half of the company's turnover comes from projects. Distinction is made between projects and operations, where the latter is often prioritized over project work. Projects are executed within the functional units, in coordination with project managers, who do not own the resources and have no formal authority over them. A PMO provides project managers and project management services within these constraints.

Sweden Large (Company C)

Company C is a large, global pharmaceutical research, development, and manufacturing organization with more than 50,000 employees worldwide. Project management differs significantly between drug development and internal improvement projects. The former types of projects are strictly governed and controlled through internal, external, and regulatory means, while governance of the latter allows for more freedom in execution. A PMO provides project management processes, methodologies, policies, tools, etc., but is not involved in the daily management of projects.

China Small (Company D)

Company D is a small, 15-employee training, consulting, and web-magazine provider company in project management. Their business is divided into a) the web-platform for the online magazine, which is used for experience sharing, conference announcement, and other information services, and b) training and consulting services, including certification for young project managers. Employees and CEO distinguish between operations and project work. The former includes the maintenance work of the web platform and the delivery of standard/open courses. Project work includes consulting engagements and company courses.

China Medium (Company E)

Company E is a mid-size engineering and R&D company with about 150 employees in the industrial communication industry. The company's products are mainly standardized electronic components, such as Integrated Circuits (ICs), marketed in B2B markets. The company has maintained a strong process culture, and project thinking mainly prevails at the management level (as opposed to employees), and especially in R&D. A Chief Scientist is in charge of all bigger projects and coordinates the resources across these projects. Smaller projects are run and coordinated within the functional organizations/departments.

China Large (Company F)

Company F is the pharmaceutical branch of a large Chinese healthcare enterprise of about 30,000 employees. The pharmaceutical business unit employs about 1,000 people. About a decade ago, they transitioned from a process orientation to a project orientation. The pharmaceutical branch develops and manufactures a variety of different drugs. The types of projects addressed during the interviews were drug development, internal improvement, and capital investment projects.

Sofia Pemsel, PhD, is Assistant Professor at Copenhagen Business School, Denmark. Her main research interests are knowledge and learning in projects and project-based organizations. Dr. Pemsel earned her PhD at Lund University, Sweden. During her time as a PhD student she was a visiting scholar at Queensland University of Technology, Australia, and SKEMA Business School, France. In 2012, Dr. Pemsel successfully defended her doctoral thesis. She has since been a visiting lecturer in project management at Umea School of Business and Economics (USBE), a visiting scholar at BI Norwegian Business School, and a post-doctoral researcher at the Universite du Quebec a Montreal, Canada (UQAM).

©2014 Project Management Institute Research and Education Conference

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