Project Management Institute

Strategy formation for project sustainable development

tales of alignment and emergence

SKEMA Business School

Abstract

The integration of sustainable development (SD) principles in projects should be linked to the SD mainstreaming efforts of the parent organization. The project's temporary organization, operating as a smaller system in the parent organization, is an object of corporate SD mainstreaming as well as a subject of its own SD strategizing. Projects have a unique position- they can interact closely with stakeholders to identify corporate and project SD issues. This would imply a relationship of alignment. However, in the multi-stakeholder SD context, alignment of planned corporate SD strategy does not sufficiently explain the challenge of integrating SD principles in projects. A cyclical relationship of alignment and emergence in the project context with multiple stakeholders appears appropriate. Project identity and notions of plausibility with stakeholders provide helpful insights. This paper presents preliminary findings from semi-structured interviews based in a constructivist transactional approach to knowledge creation as part of PhD research.

Keywords: sustainable development; strategy; emergence; plausibility; identity

Introduction

This paper explores two important areas in project research: the integration of sustainable development (SD) principles in projects (project SD strategy) from a corporate perspective; and the formation of project strategy through emergence with stakeholders in a dynamic project environment. Corporations have been challenged to sustainably manage their enterprises (WCED, 1992). This requires mainstreaming SD principles through core business processes and activities. As core business activities in many companies, projects have not escaped this challenge.

As temporary organizations operating at the micro level of sustainable development with the parent organization, projects are the object of corporate efforts to mainstream SD principles in core operations and contribute to sustainable development at the micro level. Here, I define a project as a temporary organization, involved in value-creation and social processes, to which a parent or investor organization provides resources for bringing about a strategically important benefit (Turner, 2009; Gareis, Huemann, & Martinuzzi, 2010). As temporary organizations operating in their own dynamic project contexts, projects are also the subject of their own sustainable development. Sustainable development is a systems issue (Roome, 2013; Robert et al., 2002) which requires that understanding of the system's problems flow from larger systems to smaller systems and involve multi-stakeholder perspectives (Bagheri & Hjorth, 2007). From this perspective, a project as a temporary organization can be considered a sub or smaller system within the micro context of the parent organization. As such, a project is uniquely placed to engage and closely identify with stakeholders at eye level in the project context to understand the SD issues for strategy formation. This suggests an interdependent relationship between SD strategy at the corporate level (often called corporate sustainability strategy) and SD strategy at the project level based on alignment and emergence. Research and practice on project SD is growing, yet limited (Gareis, Huemann, & Martinuzzi, 2013; Silvius & van den Brink, 2011). It appears that project SD research has yet to investigate the inclusion of SD principles in projects from this corporate mainstreaming perspective.

This paper addresses the following research questions examined through PhD research:

1. How are SD principles integrated into project strategy?

2. How do firms define corporate SD strategy at the project level (project SD strategy)? If not, why not?

3. Who are the key players and what are their roles in determining whether and how corporate SD strategy is defined at the project level?

4. What variables influence the integration of SD principles related to corporate SD strategy in projects?

The examination of these questions builds on more than two decades of research on projects and strategy, including theories of emergent strategy (Mintzberg & Waters, 1985), as well as literature in corporate SD. Project management and strategy research has focused largely on the strategic alignment perspective based on deliberate planned strategy between projects and parent organizations as a factor for successful projects and successful execution of organization strategy (Morris & Jamieson, 2005; Morris, 2009; Shenhar et al., 2007). Recent research acknowledges the strategic character of individual projects, enabling them to emerge strategy with stakeholders so that they are competitive in the project context (Artto, Kujala, Dietrich, & Martinsuo, 2008; Vuori, 2013). The concept of the project as a temporary organization and social and value creation system brings richness to strategy and project research and recognizes the social construction of the project and formation of strategy through adaptation and learning, sometimes independent of the parent organization that created it (Lundin & Soderholm, 2013; Lundin, 1995; Packendorff, 1995). This enables research to apply organizational theories related to strategy to projects, placing projects within the context of these theories.

This research report presents preliminary findings from semi-structured interviews conducted for exploratory research that examines the formation of individual project strategy through an iterative, cyclical process of alignment and emergence within the context of sustainable development. It applies theories of emergent strategy from strategic management (Mintzberg & Waters, 1985), strategic sensemaking concepts of identity and plausibility (Weick, Sutcliffe, & Obstfeld, 2005), and the project as a temporary organization to address projects as formulators of strategy within the SD context through initial organizational alignment and emergence through interaction with multiple stakeholders. Through this study, I wish to contribute in a modest way to conversations around theory in the domain of project strategy (Huff, 2002). I will show that SD integration in projects cannot be fully appreciated outside of the corporate SD context. Yet, at the same time, SD strategy integration in projects cannot be understood fully from a strategic alignment perspective based on planned strategy. SD issues for strategy formulation arise out of a multi-stakeholder context where understandings are related to project identity and plausibility. After the introduction, the paper is divided into five parts: (1) a literature review, covering SD in corporations and projects, strategy in permanent organizations, projects as temporary organizations, and strategic sensemaking concepts of identity and plausibility; (2) theoretical approach (working research model and propositions) based on literature; (3) method and data analysis; (4) findings; and (5) conclusions.

Literature Review

Sustainable Development, Companies, and Projects

Sustainable development is much debated at the societal level (SD macro), corporate level (SD micro), and in projects, as the burning challenge of the 21st century (Lacy, Cooper, Hayward, & Neuberger, 2010). The most commonly accepted definition, penned by the Brundtland Report (WCED, 1987), is “the process of development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (p. 1). SD involves balancing the economic, environmental, and social aspects of the SD system, often called people, planet, and profit or the triple bottom line (Elkington, 1998). This was meant to be a new management paradigm for development. The specific guidelines for sustainable development, including expectations of the business world, were laid out in the Rio Declaration of Agenda 21 of the UN Conference on Environment and Development in 1992 (UNCED, 1992) and called for “sustainably managed enterprises” (p. 16). Sustainable development, the process, is distinguished from sustainability (the content outcome), that is the state of continuously meeting the objectives of human welfare in a sustainable system. The SD system is in continual flux. The authors of the Brundtland Report anticipated variation in interpretation of the SD concept as it was expected to be applied to the local context. However, they insisted that there be consensus on the basic concept and agreement around a strategic framework to achieve sustainable development.

Sustainable development is commonly viewed as a philosophical concept with broad and competing definitions, multi-disciplinary content, time and spatial orientation, and rooted in stakeholder understanding at the local, national, regional, and global levels (Robert et al., 2002; Baumgartner & Ebner, 2010; Schaltegger & Burritt, 2006; Bagheri & Hjorth, 2007). It involves norms of ensuring intergenerational and intra-generational well-being, participation, justice, dialogue, and transparency (Clifton & Amran, 2011; Robert et al., 2002; Steurer, Langer, Konrad, & Martinuzzi, 2005). Conceived as a system's problem, SD has been called a “wicked problem” (term coined by Rittel and Webber, 1973) that operates at both the macro and micro level. This is due to the fluctuating state of the SD system; the complexity of relationship between the three SD pillars-economic, environmental, and social; the system actors; the multiplicity of stakeholders and their concerns; perpetual changing of constraints in the open SD system and resources to solve the problem; and the inability to define a one-time solution to the problem (lack of an end game) (Bagheri & Hjorth; Peterson, 2009; Rittel and Webber, 1993).

It has been difficult to operationalize the SD system concept for projects and corporations (Roome, 2013); Schaltegger & Burritt, 2006; Robert et al, 2002). Roome (2013) indicates that the system perspective of SD “goals and processes remain difficult to understand and illusive to science and practice” (p. 6) and have been “displaced by pre-existing non systemic understandings of development“ (p. 5). Three SD paradigms (Schaltegger & Burritt; Clifton & Amran) explain philosophical orientations concerning the SD system problems: “weak sustainability,” based on the idea that the current SD system is sound and that approaches, skills, and technologies can lessen the impact on the system, such as “greening the system or making it more socially just; “strong sustainability” or the transformational approach, asserting the unviability of the current system state and approaches to development to meet the SD goals; and “balanced sustainability,” based on the assumption that non-critical forms of natural capital can be partially substituted and that there are physical limits to economic growth. Schaltegger & Burritt indicate that these paradigms require organizations to understand and be accountable to various stakeholder perspectives, socio-political agendas concerning sustainable development, and the role of business in society (Schaltegger & Burritt).

At the micro level, corporations inherit the characteristics of macro SD— complexity of multidisciplinary content, philosophical and values bases, and multi-actor-stakeholder focus. Many companies have corporate SD (commonly called sustainability) strategies. However, researchers note that corporate SD is not often part of formal strategic processes and have concluded that businesses do not really know how to integrate SD principles into their core business and lack clearly defined strategies to do so (Baumgartner & Ebner; Epstein, 2008). Corporate SD has been called “a corporate guiding model” (Steuer et al., 2005, p. 274) and “heuristic multi-criteria approach” (Schaltegger & Burritt, p. 195) for addressing issues at the micro SD system level. This requires meaningful interpretation of the macro SD concerns with other SD system actors to identify SD issues at the micro level (Schaltegger & Burritt). This interpretation process, as anticipated by the Brundtland Report authors, has led to numerous definitions and SD practices in business (Baumgartner & Ebner, 2010; van Marrewijk, 2003). This is viewed as inhibiting the development of holistic SD strategy. Dunphy, Griffiths and Benn (2007) offer a phase-based definition, distinguishing “corporate sustainability” (ensuring excellent investor return) from the “sustaining corporation” that contributes to world SD goals (p. 16). Researchers believe that SD terms and understanding will be influenced and determined by the social context, values, culture, and development state of the organization (van Marrewijk, 2003). This, in turn, influences how an organization identifies SD issues and how stakeholders view them in terms of structured within strategy or mainstreamed in core business activities such as projects

Sustainable development is relatively new to strategic management with roots in Hart's “natural resource base view” of the firm and has yet to become fully integrated into a sustainable strategic management practice. Hart (1995) proposed sustainable competitive advantage based in three internal firm capabilities, linked to managing environmentally-oriented resources—pollution control; product stewardship (which incorporates the perspective of the stakeholder in lifecycle management); and sustainable development as a higher organizational commitment embedding the other two capabilities. However, the move to sustainable strategic management does not appear widely practiced in companies, as corporate SD tends to operate largely outside of formal and core strategic management processes, as indicated earlier. Baumgartner and Ebner and Dunphy, Griffiths, and Dunn have noted that corporate SD strategy progresses along phases from compliance on minimum requirements at the earliest phase, to legitimization or license to operate strategies, and then to later phases where the firm makes SD an integral part of business strategy.

Researchers have identified other issues that influence the integration of SD principles in corporations. These issues relate to a comprehensive understanding of the case for SD integration that not only includes the business case, but the natural case and the social case. This enables a holistic SD approach in firms that is often lacking (Dyllick & Hockerts). Even when a firm has made the Sd case, understanding may vary within the firm. Linneluecke, Russell, & Griffiths (2009) found a difference in understanding of corporate SD and practices at the top levels of a firm and understanding at the lower level where SD initiatives occur. A full awareness and understanding will enable managers to make informed decisions about SD options (Dominici, 2013). The multidisciplinary SD content presents challenges to managers who often are not prepared through management training (Audebrand, 2010). Furthermore, the systemic SD problem is commonly understood to be beyond the capability of individuals or firms to address, and requires integrative thinking and a broad approach to SD actors (Roome, 2013). This requires a broad stakeholder approach to inform SD issues at the micro level from macro level issues (Birkin, Polesi, & Lewis, 2009; Avram & Kuhne, 2008; Bagheri & Hjorth, 2007). Organizations require capability to work with and manage diverse stakeholder interests. Audebrand (2010) notes that current strategy metaphors do not prepare managers for collaboration, learning, and adaptation with stakeholders as implied by the SD concept. The diversity of stakeholders will require the capability to make trade-offs as organizations will not be able to meet all stakeholder demands as they formulate SD strategy. All of these issues impact the ability of the firm to integrate SD issues in corporate strategy and to mainstream in core business activities such as projects.

Since “a project is not an island” (Engwall, 2003), project SD should not be delinked from the project's parent or investor organization's SD mainstreaming efforts. As a temporary organization, a project is a smaller system or sub system within the SD micro level context where its parent organization operates. As sustainable development is a systems issue, understanding of the SD problem or issues flow from the larger system to the smaller system (Bagheri, 2007). See Figure 1 below. Therefore, projects are important contributors to the SD efforts of the parent organization, as well as the subject of their own SD efforts. Operating at the sub system level, projects are able to engage stakeholders in the project context at eye level, where they are able to identify more closely with stakeholder concerns regarding corporate activities. From this perspective, they are able to inform and form the strategic aims of the parent corporation. This suggests that the integration of SD principles in projects is linked by an interdependent relationship with sustainable development at the corporate level or corporate SD strategy. This means that the consideration of sustainable development in projects needs a strategic focus for successful SD integration. Many businesses have yet to achieve this focus. This is the missing link or SD nexus that integrates SD in projects and SD in parent corporations.

Strategic link between project and corporate SD (adapted from Baumgartner & Ebner, 2010)

Figure 1: Strategic link between project and corporate SD (adapted from Baumgartner & Ebner, 2010)

Interest in practice and research in project SD is growing, but still limited (Gareis et al., 2013; Beheiry, Chong, & Haas, 2006). While project research shows that corporate SD support influences how it is integrated into projects (Gareis, et al., 2011); it has not addressed holistic SD in projects from a strategic perspective within the context of corporate SD mainstreaming aims. SD research in project management standards has touched on the issue of strategy. Gareis et al. propose the integration of SD principles in the project initiation process where the investment proposal is assessed, the project is assigned, and it is initiated. However, if corporate SD strategy is not part of the business case, it might be overlooked in the assignment and project initiation process. Research by Silvius, Schipper, and Nedeski (2013) on the application of a SD maturity model for project management in 56 case studies suggests that the inclusion of SD principles in projects is related to the existence of SD in corporate strategy, while the desire alone for SD in projects was not sufficient. This seems to support the idea that SD approaches in projects need to be situated within the context of corporate strategy.

Research shows that project SD is challenged by the multiple definitions and approaches that exist and is influenced by industry (Eid, 2013; Khalfan, 2006); the predominance of particular SD issues, such as environment and the search for project level frameworks (Labuschagne & Brent, 2004); and criteria, indicators, and assessment tools to guide SD integration (Labuschagne, Brent, & Claasen, 2005; Presley, Meade, & Sarkis, 2007; Silvius & Schipper, 2010; Talbot & Venkataraman, 2011). Project SD research tends to focus on pertinent singular SD pillars (primarily environmental and social to a lesser extent), and particular industries, such as manufacturing or construction (e.g. Edum-Fotoe, 2008; Khalfan, 2006). Herrazo, Lizarralde, and Paguin (2012) researched bottom-up SD strategy formation for construction projects in a university setting, but the focus was on environmental sustainability as this was the university's SD definition. Research also focuses on specific tools, such as life cycle management (Labuschagne & Brent, 2004) and value management (Al-Saleh & Taleb, 2010; Zainul & Pasquire, 2007) for applying SD principles to project processes. Research by Khalfan and by Zainul and Pasquire indicate the importance of including SD principles in project objectives. However, this is not linked to project SD strategy. The research provides much fertile ground for variation in discussion in the literature.

Researchers have offered definitions for SD in projects, focusing primarily on the SD content (Silvius & Schipper; Tam, 2013); while others refer to sustainable lifecycle management (Labuschagne & Brent, 2004). Gareis et al. (2013) have distilled six process characteristics of SD which cut across the definitional content they believe can be applied in any project context to determine SD content. These are: (1) holistic approach of balancing economic, social, and ecologic orientation; (2) short-, mid-, and long-term orientation; (3) local, regional, and global orientation; (4) risk reducing; (5) values and ethics based; and (6) participation and capacity building. This process definition, when taken in consideration with the content definition, appears helpful for identifying SD issues for projects, as well as for the corporate SD level. This is important given that SD issues are stakeholder and context influenced (WCED, 1987).

Stakeholders can be influential in determining project SD strategy (Khalfan, 2006). The diversity of stakeholders creates a pluralistic context for the project, providing opportunities to access needed knowledge for the multidisciplinary SD content and to create shared SD values. Eskerod and Huemann (2013) and Dyllick and Hockerts (2002) note that broad stakeholder engagement also creates tensions for balancing competing stakeholder needs and perceptions. Projects need the capability to manage competing interests and to make trade-offs from a broader perspective than project self-interest. Eskerod and Huemann's (2013) assessment of stakeholder management practices, advocated by project management standards, showed mainly a risk orientation versus one based on the potential opportunities presented by stakeholder concerns. The authors suggest that a management for stakeholder approach— recognizing that stakeholders have their own legitimate interests is also necessary. Understanding SD system needs would also call for evaluating SD system needs in relation to the project and stakeholders as actors in the SD system.

The project as a temporary organization construct implies a different perception of the project manager role in the formation of SD strategy. Turner and Muller (2003) assign the project manager the role of CEO, as an agent for the parent organization. From this perspective, the project manager's role is one of leadership on SD issues (Crawford, 2013), viewed as influential (Goedknegt, 2013), and substantial, becoming an advisor on organizational changes involving sustainable development (Silvius & van der Brink, 2011). Winnal (2013) suggests that the project manager be capable of making sense of social cues in the project environment. Turner (2010) assigns project managers a medium to high influence regarding their roles on ensuring Sd in projects. This calls for project managers to have an understanding of SD principles that is multi-disciplinary and context-based (Tam, 2013), in order to identify SD issues for project strategy.

Strategy Formation in Organizations—Alignment and Emergence

Linking sustainable development at the corporate and project levels would imply the alignment of planned SD strategy. The multi-stakeholder character of the SD process, along with the dynamic environment posed by the continuing flux of SD issues, suggests another approach— that of emergence.

Strategy as a plan has largely dominated in strategic management and has become synonymous with the creation of strategy (Mintzberg, 1978). However, in dynamic, complex, and unpredictable environments, the planning approach to strategy formulation is not always appropriate. These environments usually involve the participation of a variety of strong influential actors, “divided coalitions of multiple influential actors or forces” (Mintzberg, 1973). This environment requires the organization to learn its way and negotiate with stakeholders to understand what works. Through adherence to alignment, organizations find it difficult to respond in dynamic situations. Strategy formulation in this situation becomes a process of becoming or emerging. Through learning, an organization can move toward transformation as it entails joint action and co-creation with customers and other involved actors in the organization's environment (Wiltbank, Dew, Read, & Sarasvathy, 2006).

Emergent strategy is part of a strategy continuum with planned, deliberate strategy at the opposite end. There is interplay between the degree of emergence and the degree of deliberateness. The degree of emergence (and deliberateness) is based on three key criteria: (1) nature of leadership intentions—"more or less precise, concrete and explicit, and more or less shared"; (2) nature of organization control over actor actions—"more or less firm and more or less pervasive;" and (3) nature of the organization's external environment—"more or less benign, more or less controllable, and more or less predictable" (Mintzberg & Waters, 1985, p. 259). Deliberate and emergent strategy can be an integrated approach within sub units or entire organizations supported by decentralized and distributed decision-making (Andersen, 2004).

As in strategic management in permanent organizations, strategic planning and alignment perspective is synonymous with projects and strategy. Parent organization strategy cascades to the project from corporate, business, portfolio, and program levels (Turner, 2009; Morris & Jamieson, 2005; Shenhar et al., 2007). Through alignment, the project reflects the parent organization “qualities” (Engwall, 2003). The notion of “project strategy” is a relatively recent construct; most companies usually do not refer to a project as having a strategy (Morris & Jamieson, 2005). Thus, projects have not traditionally taken on a strategic focus (Poli, 2007; Williams & Samset, 2010). This strategic focus is project strategy or “the missing link” (Shenhar et al., 2007) which is considered critical for organizational project success (Dinsmore & Cooke- Davies, 2006). The idea of independent project strategy, where a project forms strategy through emergence with stakeholders in the project context is an even more recent phenomenon in research and a dramatic change in project and strategy orientation. This is based in the construct of the project as a temporary organization and a social system and its ability to determine appropriate objectives and strategic fit to be competitive and survive in its context (Artto, Kujala, Dietrich & Martinsuo, 2008; Vuori, et al.,2013), and to formulate strategy at the corporate level as well (Shenhar et al., 2007). The following is a brief summary of the alignment and emergence perspectives in project and strategy literature.

The alignment of project strategy with organization strategy is generally accepted as good business practice, encouraging discipline and clarity in processes, ensuring executive support, facilitating control, and helping to ensure business performance through projects and competitive advantage and projects and business success (Englund and Graham, 1999; Morris and Jamieson, 2005, Shenhar et al., 2007; Turner, 2009; Dinsmore and Cooke-Davies, 2006). It is a critical factor for achieving beneficial change and creating value for the parent organization (Dinsmore & Cooke-Davies, 2006; Turner (2009); Shenhar, Milosevic, Dvir, & Thamhain, 2007)).

A number of researchers have investigated the occurrence of emergent strategy. As indicated by Mintzberg and Waters (1985), this occurs in dynamic environments with multiple, sometimes strong stakeholders that influence the direction of the project (Mintzberg & Waters, 1985; Quinn, 1990; Artto et al. 2008; Vuori et al., 2013). Morris and Jamieson (2005) and Milosevic and Srivannaboon (2007), within the context of planned and aligned strategy, have referred to the emergent qualities of project strategy and the need for dynamic management. In this context, projects shape strategy through exerting autonomy in its unique position in the project environment (Artto et al., 2008). The project can do these legitimately within the parent's organization context where the parent's planned strategy is not a fit for the project to succeed in its stakeholder environment (Artto et al., 2008; Vuori et al., 2013).

Artto et al. (2008) characterize the degree of emergence in project strategies based on the nature of project independence or autonomy within the parent organization and the strength and dynamism of the project's stakeholder environment. Gemunden, Salamo, and Kriegar (2005) and Martinsuo and Lehtonen (2009) describe autonomy in terms of the content of autonomy and autonomy based on the nature of the relationship with the parent organization. The subject and perspective of autonomy influence how the project interacts with its multiple stakeholders and on what issues. Project autonomy is essential for the emergence of independent strategy based on the interaction with stakeholders. A project must balance stakeholder interests and cannot adopt just one goal or method communicated by the management of one parent organization in a project. This ability to consider strategic options with multiple strong stakeholders and form strategy independent of the parent organization makes projects strategic (Artto et al., 2008, p. 8). Based on the degree of independence from the parent organization and the complexity of the stakeholder environment, Artto et al. (2008) define four project strategy types: obedient, independent innovator, flexible mediator, and strong leader. Strong leader has the highest autonomy to establish its own goals, objectives, and culture within a network of complex stakeholders. Vuori et al. (2013) found in an embedded case study of a customer delivery project that emergent strategy is dynamic, changing personnel who perform as strategist, as well as changing according to project phase. A successful strategic fit is formed at each phase of the project.

Identity and Plausibility in Strategy Formation

Sensemaking is important for learning and adapting with stakeholders to formulate strategy. Sensemaking, a concept largely developed by Weick, is the interpretation of words and actions of a situation in order to assign meaning, done in a social context where other actors are involved in continuing circumstances. This creates meaning and makes plausible sense from what they experience in a context. The need for sensemaking increases and becomes explicit when the meaning of things is not shared by the participants engaged in a process or the “way to engage” is not clear (Weick, et al., 2005, p. 409), such as in sustainable development where meaning is philosophical and contextually based (Bagheri & Hjorth, 2007; Robert et al., 2002), and requires multiple interpretations to address (Roome, 2013). Sensemaking is viewed as important in environments that are very dynamic and require collective action (Weick et al., 2005).

The sensemaking concepts of identity and plausibility provide helpful lenses for the identification of project SD issues and the emergence of appropriate SD strategy in interaction with stakeholders. Organizational identity has been linked to stakeholder management approaches (Brickson, 2007). Projects as temporary organizations have identity that is formed from “layers of networks, localities, and institutions” from where project personnel are drawn and linked to “… multiple perceptions and loyalties of the project members… in personal ties and social structure” (Grabher, 2002, p. 208). This includes project owners, parent organizations, investors, sponsors, suppliers, and other stakeholders in the project context. “From the perspective of sensemaking, who we think we are (identity) as organizational actors shapes what we enact and how we interpret, which affects what outsiders think we are (image) and how they treat us, which stabilizes or destabilizes our identity” (Weick et al., 2002, p. 416). This identity is influenced by an internal or external sensegiving process from leaders or outside stakeholders (Maitlis & Lawrence, 2007; Maitlis, 2005). These interpretations and motivations affect “patterns of organizational action [I add to this decision making] over time” (Dutton & Dukerich, 1991, p. 517).

Plausibility appears central to identifying and balancing stakeholder issues. Strategic learning leads to what makes sense in the context of experience, or plausibility. “Plausibility is not about truth and getting it right. Instead it is about continued redrafting of an emerging story so that it becomes more comprehensive, incorporates more of the observed data, and is more resilient in the face of criticism” (Weick et al., 2005, p. 415). Plausibility provides “an aura of accuracy,” is contextually based, and motivates people to action (Helms-Mills, 2003). However, what is plausible for one group of stakeholders is not plausible for another. Plausible stories have to be “reasonable and memorable.” (Helms-Mills, 2003, p.67), keep things moving and “generate new data and create(s) opportunities for dialogue, bargaining, negotiation, and persuasion that enriches the sense of what is going on” (Sutcliffe, 2000 referenced in Weick et al., 2005, p. 416). However, who determines plausibility and at what point is it an issue (Helms-Mills, 2003)? These questions need to be answered in the context of the actors involved in its creation, power, and influence and is part of the process for guiding emergent strategy. This is at the core of stakeholder management.

Theoretical Approach

The research is guided by a working theoretical model that was developed from the literature review. The research model is comprised of propositions for each variable and is presented as an “evolving guide” to explore the research questions. Therefore, the research model will guide the investigation as an initial construct and will be further developed by the research findings. The model of inquiry presents one general proposition which is supported by six subpropositions. The propositions are not a set of normative statements, but hunches about the possible reality of integrating holistic SD principles in projects.

General Proposition: Corporate SD strategy cannot be translated one-to-one to project level, but SD strategy formulation is cyclic and emergent.

Proposition A: The type of corporate SD strategy indicates whether or not SD principles will be integrated in a project, establishing parameters for considering project strategy holistically, and addressing all three (economic, environmental, and social) principles, or as single SD issues.

Proposition B: The project understanding of SD business cases and holistic SD influences the identification of SD issues in projects.

Proposition C: The nature of strategizing processes at the front end (initiation stage) of the project will influence whether and how SD principles are integrated in projects (project SD strategy).

Proposition D: The autonomy of projects in the organizational environment is necessary for projects to adapt corporate SD strategy and to emerge and refine project SD strategy from its stakeholder environment.

Proposition E: The approach to project stakeholder management influences whether, what, and how SD issues are identified and formulated into SD project strategy.

Proposition F: The ability to translate corporate SD aims to project SD strategy influences, whether and how SD principles are integrated in projects.

Research working model-theoretical framework--A cyclical-iterative approach to project SD strategy (source: Keeys forthcoming, 2014)

Figure 2: Research working model-theoretical framework--A cyclical-iterative approach to project SD strategy (source: Keeys forthcoming, 2014)

Method and Data Analysis

This study uses a constructivist perspective and qualitative methodology for exploratory research, based on semi-structured interviews. The interviews were recorded and the data analyzed against the researcher's working model. “Constructivism is a theory of knowing, not of being” (Glaserfeld in Boden, 2010, p. 84). It is about epistemology, not about ontology. It acknowledges the subjectivity of the researcher as observer. Constructivism views knowledge “… from the participant's point of view with the aim of understanding how shared versions of reality emerge and are maintained” (Burrell & Morgan 1979, referenced in Johnson & Duberley, 2000, p. 80). The study findings emerge or are created as the investigator proceeds interactively with the research subject. The investigator leads the inquiry with her theoretical assumptions (research model). Social constructions by the study subjects are “elicited and refined only through interaction between and among investigator and respondents” (Guba & Lincoln, 1994, p.111). The interaction of the researcher and subject lead to “more informed and sophisticated,” constructions that coalesce around consensus between the researcher and the research subject. This interaction facilitates discovery in the inquiry (that go beyond the researcher's original constructs or theory), not possible with positivist quantitative research and makes knowledge creation transactional (Guba & Lincoln, 1994). It is through this approach that my proposed conceptual framework or my construction of the reality, guides the inquiry and viability of the model that is confirmed for the research context. The goodness of the research is judged by viability as the “fit to reality” or the ability to solve a problem (Glaserfeld reference in Riegler, 2012). I believe the constructivist paradigm is suited for exploring the socially constructed reality of project SD strategy and for conducting translational research to produce findings that could be translated quickly to the practice context in terms of their utility (Drouin, Muller, & Sankaran, 2013).

Findings

At this stage in the research, I have preliminary results from nine interviews in which I explored the working research model. Early findings point to issues that do not facilitate a one-to-one relationship between corporate SD aims and the integration of these aims in projects from an alignment perspective. Issues are the strength and maturity of corporate SD identity; ability to negotiate and maintain corporate SD identity in the multi stakeholder project context; importance of the project context for establishing project identity and plausibility of SD approaches; nature of the contractual relationship governing the project and key stakeholders; and the difference in performance metrics. The client/owner versus contractor perspective and project conceptualization/definition versus project execution perspective appears to have a distinguishing impact on the model. Internal versus external project perspective also appears to influence how corporate SD aims are integrated in core business projects. The concepts of project identity and plausibility appear to play a role in identification of SD approaches while plausibility provides insights on balancing of conflicting SD interests.

Frustrated Alignment Expectation—Sustainable Development at the Corporate Level and Sustainable Development in Project Context

The interviewees expressed an understanding of corporate SD strategy as encompassing the SD aims of the company and viewed the strategy as holistic. When the parent organization establishes the project to respond to internal or external requirements to meet strategic business aims, the assumption is that these SD characteristics or aims are passed on to the project. However, only a couple of interviewees could refer to specific guidelines on how to link corporate SD strategy with projects. Yet, there was a general agreement that a project should support the corporate SD aims and align with that strategy; the project does not necessarily have its own strategy.

A senior sustainability director who participates in the company's strategy process and decisionmaking expressed this expectation of alignment—

...Without complete alignment, a corporation will never achieve the corporate sustainability strategy.

When asked whether the company's corporate SD aims could be expressed in terms of a project SD strategy, a project director for the construction of a major power facility responded—

...sustainability in looking at the corporate sustainability, that's not necessarily a specific requirement for an individual project. I don't see an individual project as having their own independent strategy as much as they're contributing to overall strategy and objectives of [the company]

Although all participants expressed expectation for alignment between the project and the parent organization, the interviewees revealed that certain issues create a disconnection between corporate SD aims and the ability to ensure those aims are expressed in projects.

Multiple SD understandings and maturity frustrate SD alignment. The understanding of SD and the SD maturity of company clients were often revealed as an issue. The same sustainability director who expressed the importance of alignment for success of the company's SD strategy expressed it this way—

We can drive stuff down. Then there may be a 'disconnect' with some of our clients. Some of our clients have different levels of maturity in terms of their expectations for socio-economic development in their projects. Although they obviously need to sustain themselves, but some of them take on their responsibility themselves; others want to share that responsibility with contractors. It all depends on the scale of the project and your role on that particular project.

SD maturity referred to whether the company has a holistic approach of SD and is motivated by risk only or also seeks opportunity. All the interview participants believed their company had a holistic SD strategy. However, further questioning revealed the understanding of SD pillars and principles differ by organization and appeared to be influenced by industry. The findings indicated that (1) sustainable development has different meanings depending upon the context; (2) Different aspects of sustainable development seemed to drive core business strategy. Each organization approached the concept from a particular emphasis, mostly environmental, and to a lesser extent, economic and social, and at times used different terminologies; (3) The views as to whether sustainable development figured as central to corporate and business strategy and driven down to project level varied; (4) Responses indicated that certain social and economic development issues appeared more on the credit side of a SD debit-credit equation for addressing SD charitable and volunteering efforts; (5) SD is viewed as something that is evolving and in the balance.

Creating Project Sustainable Development Identity around Core Sustainable Development Drivers

When SD aims are transferred to the project environment, the corporation is challenged to maintain its SD identity as characterized in its corporate SD strategy, and to pass this identity onto to the project in interaction with other stakeholders. Initially, these stakeholders are the client if in a client/project service provider or project execution/agent relationship. The Project Director explained it this way:

I think those kinds of projects where the ultimate goal of the project or the output from the project is inside of the corporation allows the strategy at the project level and the corporate level to interact a little bit. When you're doing external projects, there still needs to be some connection, like I said, we are not going to do projects we don't feel comfortable with, but at the same time, because the client's corporate view of corporate sustainability does not match up with ours, doesn't mean we are going to say we're not [going to do the project]. 'Yours is more weighted toward environment or weighted more toward this.' So, it's always a little tricky.

The interviews revealed that projects in practice negotiate a SD identity based on the core SD drivers that the participants bring to the project. Alignment is around these identities and not the corporate SD strategy. All the participants spoke of their corporate SD approaches as holistic, encompassing all three SD pillars. As seen, this understanding is not always holistic. Entire corporate SD aims are not necessarily drilled down to projects. Thus, the challenge for a company is to negotiate around key SD issues/values for the firm or SD drivers. The SD issues that are more closely connected to the organization's survival seem to have the greatest influence on the establishment of parameters for the project and project strategizing. Core SD drivers provide the foundation for negotiating a SD identity for a project in the project context. The interviewees revealed that these core SD drivers are communicated through sensegiving from the parent company. This sensegiving is communicated in numerous ways—through training of mid-level and senior management, stories related to specific SD organizational efforts on the internal internet, information sessions, volunteer projects, and internal projects to create sustainable internal business processes. These sensegiving activities communicated the essential SD issues that become the basis for creating project identity and therefore, influence the identification of project SD issues and strategizing around those issues. Some examples of SD drivers:

The company sees sustainability as a priority for business success and this is expressed through its goals for human resource development in the company— knowledge impartation and skills transfer, materials use, and technology selection. (Assoc. Vice President, Operations/Energy Projects)
[He] expressed corporate sustainability in terms of the company taking a “holistic look” at what they are doing. He described sustainability at [the company] as “green.” He indicated that [the company] is known to be “totally green.” (Program Manager)
The focus has “rightly been on your financial sustainability and commercial risks,” other than safety which remains priority for the company, as the company has experienced profit losses and is only now seeing a turn around.” “Important issues are employee relations and managing relationships, such as labor relations, more effectively (Sustainability Director)

Alignment and Strategizing Around Sustainable Development Identity (Core Sustainable Development Drivers)

Multiple players operate in the project context. The project itself is a mixture of different parent organizations—client, service/execution provider, suppliers, beneficiaries, and others who constitute the project team/s—and other strong stakeholders. Each brings to the project its SD identity rooted in its core SD issues and enters a process of renegotiation and securing even a new identity in this strategizing process. The project SD identity is a reference point for determining the importance of an SD issue for project strategizing and predicts the willingness of the project participants to take action or invest in the SD issue. The ability of a participant in the project to influence SD strategy is influenced by the strength and maturity of the SD identity, and the point for entering the project lifecycle. From the contractor perspective, the project participant could enter the project at the project initiation phase as an external contractor to assist the project owner in developing the concept and design, or as an execution contractor to execute what has already been planned. In each case, the contractor goes through a process of understanding its business case for participating in the project which is influenced by its SD identity. This identity is demonstrated at the stage of accepting the project and influencing the project at its various lifecycle stages. SD identity impacts how the contractor eventually decides on these issues with the project stakeholders. The project participant seeks to find alignment at this stage where possible. However, its ability to influence strategizing is facilitated or limited by the point at which it enters the project lifecycle and the SD maturity of the project owner and other strong stakeholders. During this project initiation process (point at which the contractor enters the project), the contractor tries to find alignment with the client on the issues where they can bring value and align with their own key values. The following is an example of key SD identity for the engineering and construction company for which financial/economic development, ethics, and safety were key drivers:

I asked the interviewee, in developing the bid, how he ensured that [the company's] corporate SD aims were addressed. He responded that 'a couple of corporate sustainability issues came into play'… The bid process paused for two to three months after the prequalification stage. [the company] was preparing the pricing for the design bid while working with [a partner]. [the interviewee's company] did not want to go into the concession unless there was a solid business case. “We are not going to go into a concession project that has to be run and managed for 15 years unless there is a solid business case behind it. This came largely from [us]. We are on the ground here. We can't be seen as a predator coming in and doing construction and then buzzing off. We have got to live here. We are going to be successful. (Project Manager)

The interview comments indicated that the ability to align SD identity in projects has its greatest influence at the early project phases. Interviewee comments indicated that their ability to influence the nature of SD on the project was determined by their role in the project and the point of entering the project.

In a project execution role as contractor, the participant saw the client as having the greatest influence. The contractor aim of preserving long-term client relationships becomes a key SD driver from the contractor's perspective and the contractor seeks value accommodation with the project owner around key SD drivers for the contractor. The following summary describes the view of certain issues as being key for the company to get involved in a project, but after that, the client's view is seen as taking over—

Regarding the company SD vision, objectives, and values, these are not addressed directly in projects and often the client has already determined the approach. At the project level, “that's where it gets a little skirted.” “We always evaluate projects as to whether or not we are going to bid on it within the context of whether or not it fits with our strategic intent. We have certain strategies, we want to work in certain markets, we want to deliver certain technologies, and we want to make use of resources in a certain way. Those decisions get made at the earliest stages of the pursuit. Alright, so that is one element of looking at it from a sustainability context. Does it fit the strategy? .However, after that it gets a little more difficult.. I would be hard pressed to say we start out the pursuit by saying what the most, and this is probably not the nicest way to say, what the greenest way to get there. Most often we don't think like that unless the client's request is very specific in that he has certain technology choices he must use because he is under some pressure to meet some requirements somewhere in the lifecycle.” (Vice President/Operations/Energy Projects)

The role perspective is also important. Again, the project participant negotiates and strategizes around core Sd issues for the participant and seeks plausibility.

“The project must address the concerns of two clients in developing the SD approach. These are the project owner, usually the government but can also be a private organization and the construction contractor who assumes the cost of the project. [It is] “easier to accept SD directions from the project owner, but not the one who is paying. He emphasized that there are two different approaches. “I don't want to maximize in the proposal, things that make economic impact so high it is rejected or in conflict. We try to be realistic. What we try to propose is either a good solution by us with no economic impact, so no problem, or a little economic impact, and then we explain what it means in feedback from the interested holders [interested parties] and try to convince [them] it is a good deal…. That's a good balance.” (Project Manager/Senior Partner)

Conclusions

These early research findings, guided by the research model, show integrating SD strategy in projects cannot be appreciated outside the context of the parent corporate SD strategy, but nonetheless, alignment with corporate SD strategy cannot fully explain how SD principles are integrated into projects. Projects do not create SD identity through alignment with its parent organization only. Project SD identity is the result of the interaction between multiple SD identities based on SD drivers of the project participants. Project participants attempt to maintain SD identity in the project context through negotiation, conversations around core drivers and other issues, and creation of plausible approaches that attempt to balance multiple stakeholder concerns. As organizations are not always able to align corporate SD strategy with projects, they attempt to establish project SD identity through efforts to align key organizational SD drivers within the project context. The strength of influence on the integration of SD issues in projects depends on the point at which a participant enters a project

Project strategizing to include SD issues involves attempts to align SD identity of project stakeholders at the stage in which a stakeholder enters the project lifecycle. Project SD strategizing involves seeking plausibility with other stakeholders in the project context through negotiations and conversations. The project manager uses understanding of key corporate SD drivers (SD identity) of project participants and market SD issues, including risk, to make sense of project SD issues with stakeholders. Key project personnel seek alignment with key SD drivers and plausibility to translate corporate Sd aims in the project context, addressing the tension between corporate SD identity and project SD aspirations. Sensemaking is a key aspect of this.

At this stage of research, it is not appropriate to provide a more detailed explanation of these results, as these are initial indications of project SD strategy formation issues that have been constructed through the transactional process of understanding the research problem from the initial perspective of the researcher in interaction with the research participants. These are limitations inherent at this stage of early findings.

The next step of the research will be the preparation of case studies for four projects. At this stage, the research model and propositions will be further developed and refined; alternative theories identified, if appropriate; new propositions offered; and the viability of findings discussed in terms of its “fit for purpose” and translational value.

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Lynn A. Keeys is a PhD candidate in strategy, program, and project management at the SKEMA Business School in France. She is also an independent international consultant in strategy and project management, and consults on various sector programs and projects with bilateral and international donors and international organizations. Her special interest is the relationship between organizational strategy and projects, especially emergent strategy in multistakeholder environments. She specializes in program and project strategy, design and planning, project and strategy facilitation, and organizational project management. She has published research articles and has made presentations at sustainable development and project management conferences.

 

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©2014 Project Management Institute Research and Education Conference

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