Institutionalization of a collaborative governance model to deliver large, inter-organizational projects

Inter-organizational project governance

The origins of research on inter-organizational relationships (IORs) and governance dates back to the work on transaction cost economics by Williamson (1979), who introduced markets and hierarchies as two ends of a continuum on economic transactions. This early work has served as the basis for substantial body of research on managing IORs, such as various forms of arms-length and collaborative relationships, for example, in supply chain management and outsourcing (e.g. Ellram et al., 2008; Gulati et al., 2005; Liu et al., 2009; McIvor, 2009). Research has also addressed governance of projects, which refers to the governance of individual projects (for an extensive literature review, see Ahola et al., 2014). We approach project governance as areas of corporate governance related to project activities (Ruuska et al., 2011).

Large inter-organizational projects present a significant governance challenge. Such projects are essentially represented by a dynamic network of both vertical and horizontal relationships (Chakkol et al., 2018). This is fundamentally different from more permanent operations that typically involve long-term, vertical IORs (Cao and Lumineau, 2015; Gulati et al., 2005). In large projects, the organizations are working towards a shared goal, but each actor also has its own, often implicit and sometimes conflicting, objectives and expectations (Ruuska et al., 2011). Hence, managers need to facilitate the development of common goals among the complex network of project actors, representing different organizations and having diverse skills, backgrounds and limited previous co-operation (Aaltonen and Turkulainen, 2018; Chakkol et al., 2018; Gann and Salter, 2000; Geraldi et al., 2011; Lewis and Roehrich, 2009).

Focal for management of IORs are both contractual and relational governance mechanisms (Cao and Lumineau, 2015; Chakkol et al., 2018; Lewis and Roehrich, 2009; Liu et al., 2009; Roehrich and Lewis, 2014; Wacker et al., 2016). Contractual governance refers to explicit and formal agreements that are usually done in written format. These contracts are legally binding for the parties. Relational governance, however, is the basis of voluntary collaboration, emerging from values and commonly agreed processes. In contrast to contractual governance, relational governance incorporates trust and commitment, relational capital, information sharing routines and informal exchange. Governance of complex projects requires both contractual and relational aspects (Caldwell and Howard, 2014; Chakkol et al., 2018; Roehrich and Lewis, 2014).

Within the context of projects, empirical research has, for example, assessed governance practices and the overall governance model of large projects (Ruuska et al., 2011). Furthermore, research has assessed the management of relational and contractual governance, for example, in the context of procuring complex performance (PCP) (Lewis and Roehrich, 2009; Roehrich and Lewis, 2014) or governance in project-based operations (Chakkol et al., 2018). Research concludes that governance practices work to facilitate the management of complexity; although contractual governance and relational governance have their limitations when used separately, they complement each other to manage complexity (Roehrich and Lewis, 2014). In complex projects, a governance model can facilitate formalization of informal collaborative practices and help transfer learnings across projects (Chakkol et al., 2018). Recent empirical evidence puts forth the overall benefits of collaborative project governance models, facilitating relational capital and trust-based social norms; examples of landmark projects using collaborative governance models include Sutter Health's projects, Heathrow Terminal 5 and Crossrail (Ballard, 2008; Davies et al., 2009; Dodgson et al., 2015). In the infrastructure and construction sectors, researchers have reported that many dominant and counterproductive governance logics affect the poor performance of projects in the field (Bygballe and Swärd, 2019; Chakkol et al., 2018); an extensive number of studies and reports in different countries discuss the adversarial and short-term culture of the field with traditional lump-sum contracts, calling for collaboration, long-term co-operation and building of trust (Egan, 1998; Gadde and Dubois, 2010; HM Government, 2020).

Project alliancing—a collaborative inter-organizational project governance model

Project alliancing represents a collaborative project governance model to manage IORs in a large project (Aaltonen and Turkulainen, 2018; Walker and Lloyd-Walker, 2015). It has its roots in the North Sea oil projects in early 1990s and to date, has most extensively been applied within the Australian infrastructure and construction sectors. In project alliancing, the parties form a joint project and work under a joint multi-party contract (Aaltonen and Turkulainen, 2018; Lahdenperä, 2012). Alliance participants work together as an integrated, collaborative team that acts with integrity, shares positive and negative risks related to the project and assumes joint responsibility for the design and construction of the project in a joint organization (Lahdenperä, 2012). In order to succeed, project alliances require timely and fast development of trust, respect and interaction among the organizational members that often have no shared history of co-operation and collaboration (Hietajärvi and Aaltonen, 2018; Walker and Lloyd-Walker, 2015).

In general, project alliancing can be understood as a contracting arrangement and a form of organizing between two or more entities that undertake the work cooperatively to achieve agreed-upon outcomes (Jefferies et al., 2014; Love et al., 2011; Walker and Lloyd-Walker, 2015), hence, having characteristics of both contract and hierarchy (Gerwin, 2004). Project alliancing also requires significant behavioral and cultural-cognitive changes. The principles of good faith and trust as well as an open-book approach, commitment to “no disputes,” best-for-the-project unanimous decision-making processes, a no fault–no blame culture and a joint management structure are its essential features (Walker and Lloyd-Walker, 2015). In project alliancing, governance practices, such as jointly shared key performance tied to bonuses and sanctions, are used to support the collaboration of the project participants in a manner best characterized as “we all sink or swim together” (Walker and Lloyd-Walker, 2015). Consequently, both contractual and relational governance practices that differ significantly from more conventional project delivery forms with fixed-price contracts are required for successful project alliancing. Thus, project alliancing requires a substantial shift in the regulative, normative and cultural-cognitive elements of institutions (Scott, 2008) and new management competences to promote changes in the behavioral logics (Schilke and Goertzen, 2010).

Facilitating institutionalization through institutional work

Research on institutional change and institutionalization has roots in institutional theory, for example, in the work on how organizations become to use the same managerial practices, such as TQM (e.g. DiMaggio and Powell, 1983; Westphal et al., 1997). Scholars have investigated institutionalization and institutional change extensively as well as the processes associated with it at the institutional field level, defined as sets of organizations that together form a recognized area of life, including key suppliers, consumers, regulatory agencies and other organizations that produce similar services or products (DiMaggio and Powell, 1983; Maguire et al., 2004; Wu and Fu, 2018).

Recently, the focus of research on institutional change has shifted to the interaction of institutional change processes at multiple levels of analysis. In particular, the idea of projects as drivers of institutional change at the field-level has received increasing attention (Tukiainen and Granqvist, 2016; Winch and Maytorena-Sanchez, 2020). This research stream suggests that while projects and their organizing are being shaped by their institutional contexts (Engwall, 2003; Grabher, 2002; Manning, 2008), these temporary organizations can also shape the foundations of the institutions, such as the regulative, normative and cultural-cognitive elements of institutions (Scott, 2008) and, hence, produce institutional change themselves (Lieftink et al., 2019; Matinheikki et al., 2019). Following this line of thought, a project (Maoret et al., 2011) or a series of projects (Grabher and Thiel, 2015; Manning and Hagen, 2010; Perkmann and Spicer, 2007) can be considered as producers of institutional change at the field-level. Through the process of institutionalization new forms of organizing become legitimate within a field (Suchman, 1995). For example, Maoret et al. (2011) suggest that individual projects can act as field-configuring events and serve as structuring mechanisms for field-level change, while Manning and Hagen (2010) highlight the value of inter-project links in ensuring the continuity of institutional change. Tukiainen and Granqvist (2016) developed the notion of “institutional projects,” defining them as projects that drive institutional change. They showed how regulatory change in the university sector was produced through intertwined micro-level activities in one project that led to recreating the field and pointing to the central role of boundary objects, such as project plans between consecutive projects in securing the institutional change. These institutional projects have characteristics similar to those of “vanguard projects,” which are ground-breaking projects that lead the way, for example, to a new business area or technology (Brady and Davies, 2004; Frederiksen and Davies, 2008; Laurila and Ahola, 2021).

The perspective on projects as drivers of institutional change highlights human agency and institutional work of the actors. A particular stream of institutional research adopts the perspective of active agency and deals with processes through which actors who have an interest in particular institutional arrangements create, construct and legitimize new or strategically shape existing institutional structures, such as organizational forms, through their institutional work (Greenwood and Suddaby, 2006; Hardy and Maguire, 2017; Lawrence and Suddaby, 2006; Maguire and Hardy, 2006; Maguire et al., 2004). Previous research on institutional work has shown that individuals' agentic behavior plays a crucial role in changing practices and interactions in institutions (Lieftink et al., 2019; Matinheikki et al., 2019). In mature fields, such as the infrastructure and construction industry, the role of centrally located field actors has shown to be particularly effective in driving change projects because of their power positions instead of peripheral players (Greenwood et al., 2002).

Institutional work may take various forms, aiming to create, maintain or disrupt existing regulative, normative and cognitive institutions that guide individual and organizational behavior to gain legitimacy (Lawrence and Suddaby, 2006). Consequently, the institutionalization of a collaborative governance form requires purposeful actions to create, sustain and legitimize new regulative, normative and cognitive elements that govern project participants‘ behaviors in projects. Institutionalization of new constructs typically progresses in phases including problematization, theorization and legitimation (Greenwood and Suddaby, 2006; Lawrence and Suddaby, 2006). For example, development of inter-organizational connections through which practices may become normatively sanctioned and associating new practices with existing institutionalized practices, illustrate institutional work that aims at shaping normative and cultural-cognitive institutions (Lehmann et al., 2019). Currently, however, we have limited understanding of the progress and diverse forms of institutional work needed to institutionalize a collaborative project governance model, where both the contractual and relational governance elements differ significantly from the conventional project delivery forms.

In the context of project-based industries, the majority of the economic and operations activities take place in single, temporary inter-organizational projects, tying a network of organizations together for a specific time to work toward a common goal (Artto and Turkulainen, 2018; Geraldi et al., 2011; Hellgren and Stjernberg, 1995; Sydow, 2022). These temporary inter-organizational settings can be considered as arenas for engaging in institutional work and developing new institutions, i.e. giving rise to new rules, beliefs and practices and for developing novel ways of organizing, such as new governance models that may become shared more widely and institutionalized at the field-level. However, the structural features of project-based industries, including complex networks of diverse actors with many changing task interdependencies and interfaces, hinder innovations and long-term development and institutionalization (Bygballe and Ingemansson, 2014; Bygballe and Swärd, 2019; Levering et al., 2013). Similarly, the nature of projects as temporary organizations hinders organizational learning (e.g. Argote et al., 2021; Brady and Davies, 2004) [2]; while the organization learns during the project, the organization is dissolved after the project closure. Hence, creation of institutional change and institutionalizing new practices at the field-level is even more challenging than in a traditional organizational context.

Research context

When we entered the field in 2014 to examine the country's first public infrastructure project alliancing model, we soon noticed that the industry representatives were not only engaged in delivering the first project with the novel collaborative governance form but wanted to also see the project as a significant driver of change within the whole infrastructure sector. The representatives were determined to ensure that the learnings from the pilot project and new kinds of collaborative ways of operating inherent in project alliancing were developed, standardized and spread to future projects. This was illustrated by the director of the Transportation Agency (TA): “This project is not a traditional project; it is more like an opening to something new for our industry … It will transform the old, adversarial practices into a collaborative and innovative way of working.” This early notion led us to focus on how the new collaborative governance model and its contractual and relational governance elements were institutionalized within the industry through institutional work of different actors over time. Consequently, we engaged in process research (Langley, 1999).

The industry sector in Finland is relatively dense, consisting of clients, contractors, special contractors, construction product firms involved in infrastructure project operations serving primarily the domestic market. Public procurers, which include state actors and municipalities, play a powerful role in the industry as major investors in the infrastructure. Overall, there are only a few key firms with significant resources and competences in infrastructure construction. The infrastructure sector in Finland is also highly regulated: national norms and regulations condition infrastructure practices and project work, set boundaries and requirements for actors operating within the field, as well as define and specify project delivery models and governance arrangements. In addition, the role of different industry associations in developing standards, norms, templates and practices on how project actors should work under different governance models has been significant.

The used procurement approaches and project governance before 2010 included private-public-partnerships, design-bid and build, design and build and particularly traditional fixed-priced contracts that facilitated price-competition and competitive bidding and resulted in lack of collaborative governance approaches. The industry was characterized by adversarial IORs, mistrust, disputes and extensive use of claims and extra work. Project conflicts and strong emphasis on the contracts were seen to contribute to low productivity and innovativeness within the field (Lahdenperä, 2012). Consequently, poor project performance was encouraged in search for alternative collaborative project governance models. Table 1 summarizes the perceived differences between the conventional project governance models and project alliances to govern large projects as perceived by the key industry members [3].

The analysis phase covers the preparation activities for the introduction of the collaborative project governance model by key actors of the infrastructure industry (2002–2010) and the execution of three institutional projects (2010–2020), which have been the first and most significant public infrastructure alliancing projects in Finland to date as well as field-level development programs initiated by the institutional projects (2014–2020). The consecutive institutional projects were analyzed as embedded-unit cases (Yin, 2009) and they include Project A (105 million EUR railway renovation project, 2010–2015), Project B (220 million EUR complex tunnel construction project, 2010–2016) and Project C (340 million EUR complex light rail project, 2015–2021). The projects had high structural, socio-political and emergent complexity (Maylor and Turner, 2017). The three projects were the first significant public projects in the industry that used the novel collaborative governance model and contributed to the field-level institutional change process; subsequently, they were selected as the focus of our project-level analysis, as they were the most significant alliance projects were institutional work was taking place during the institutionalization of the governance model between 2010–2020. As the institutional projects were implemented consecutively they also enabled the analysis of the institutional work and its development during the institutionalization process. Furthermore, the projects were also utilized as salient examples in different industry-level development programs where institutional work was carried out to advance and legitimize project alliancing in 2014–2020. These programs by networks of organizations included industry-level development program led by the clients (IPT1 2014–2016, IPT2 2017–2019, IPT3 2020-), by contractors (LCIFIN, 2014–2015, RAIN1 2016–2018, RAIN2 2019-) and by a special contract term working group (2015–2020).

By 2020, the project alliancing model had been used in over 50 projects in Finland and achieved legitimacy in delivering large, public inter-organizational projects, culminating in issuing official standard project alliance contract terms in 2020 (endpoint of the institutionalization process). The standard was based on learnings from the institutional projects and field-level development program work. The total value of the projects delivered with the alliancing model had increased from zero to over five billion euros, constituting over 10% of the whole infrastructure market. In addition, the industry culture was reported to be much more collaborative than before the project alliancing model. The unit of analysis in this study is the field, i.e. the infrastructure sector. The unit of observation includes institutional work both at the project and field levels. Figure 1 presents the timeline of the pre-project phase, institutional projects and industry-level development programs in which institutional work took place.

Data collection

We engaged in various types of data collection to understand the institutionalization of the model in practice. The collected data is presented in Table A1. The longitudinal primary data consist of 49 interviews with key project members (6 interviews for Project A, 11 interviews for Project B and 13 interviews for Project C) as well as industry professionals engaged in the development programs (19 interviews) conducted during the period from November 2014 to September 2020. Industry professionals, including the industry association's regulatory project representative, representatives of the project alliancing consultancy and researchers who were involved in introducing project alliancing, considered purposeful informants from the perspective of institutional change and institutional work, were interviewed. The semi-structured interviews lasted 50–120 min. Two to three interviewers were present in all interviews. The themes of the interviews included, for example, the introduction of project alliancing to the country and to the project, project alliance governance practices and values that were seen to be required and implemented in alliances, change efforts that the actors had taken regarding the project alliance governance model, industry-level development activities and the interviewees' perceptions of the ongoing collaborative shift within the industry. All the interviews were recorded and transcribed for the analysis.

In addition, we participated in lessons learned sessions for Project A, in two project workshops and lessons learned sessions for Project C and in various workshops of service providers' development programs from which field notes were written. Furthermore, we collected archival data to complement the primary data sources and particularly to understand the research context. These data include various project reports, plans of project-based firms participating in the alliances and public project presentations and speeches. The documentary data complemented the primary data in terms of the institutionalization activities and events that had taken place before the first pilot project and documented the key events of the institutional projects and other development activities regarding the project alliance governance form in the field.

Data analysis

To map the development of the sector-level governance model, we followed an inductive approach in the process of data analysis (Langley, 1999) and analyzed the institutional work of actors related to institutionalization of the governance model in terms of both relational and contractual governance practices at both project and field levels. During the first coding round, the analysis focused on the activities, change efforts, significant events, their timing, decisions and actors related to the development of contractual and relational governance practices within the industry and in the institutional projects. After this, the analysis and structuring of the data proceeded from first-order categories to second-order themes on institutional work related to contractual and relational governance (illustrated in Tables 2 and 3). Next, we focused in more detail on the analysis of the links between the institutional projects and institutional work in the field-level development programs and how the institutional projects drove the institutionalization of the collaborative project governance model and its contractual and relational governance aspects (Table 4). Thus, we were able to start theorizing how the institutionalization of the collaborative project governance model unfolded through institutional work at both institutional project and field levels.

Preparation phase: Toward the collaborative governance model (2002–2010)

We identified several activities of the key actors of the field that preceded the first institutional project. During 2000–2010, representatives from strong public procurement organizations, industrial associations, key constructors and a new alliance consultancy engaged in institutional work to develop novel solutions and governance models to manage complex infrastructure projects characterized by cost and schedule overruns and conflicts and contractual disputes. Table 2 presents data analysis related to different forms of institutional work at the institutional field level during the preparation stage. This institutional work was carried out by individuals and organizations, aiming at questioning the established governance models and in creating new contractual and relational governance practices.

Questioning established governance models and envisioning new ones

The leading field-level actors increasingly questioned the current taken-for-granted values and fixed-priced governance models within the local infrastructure sector, mainly because of experienced economic inefficiencies. Problems with the existing governance models were evident and the lack of trust and opportunism were considered the key reasons for project governance challenges. Therefore, the actors first interpreted the problems prevalent in the field and then framed project alliancing as one possible solution through gathering data and experiences about the Australian model and examining opportunities for contextualization especially from the legal and regulatory perspectives. However, there were challenges related to the contractual aspects of the model (European procurement legislation and price component), hindering piloting of the model. Ultimately, lack of experience-based knowledge of contractual and relational governance practices and a lack of facilitators were identified as the main challenges in taking the governance model forwards.

International networking and emergence of a knowledge broker for the introduction of the alliancing governance model

When a field-level knowledge broker emerged (a consultancy company focused on promoting project alliancing, Alliance Consultancy (AC)), change started unfolding (2006–2007). One of the founders of the consultancy, a highly networked individual with extensive experience in leadership positions at infrastructure construction companies, benchmarked integrated project deliveries in the US with the intention of improving productivity and searching for new practices for the infrastructure and construction industry. The consultancy started acting as an active knowledge broker and intermediary, developing networks with various academic institutions and actors in Australia to acquire knowledge on alliancing contracts and collaborative practices that were then developed further and shared with the leading field-level organizations. Therefore, AC played a crucial role in building the international networks for knowledge transfer and required capabilities to implement the governance model.

Establishing a knowledge base and momentum for relational governance

In 2009, key industry players, including client representatives and the alliance consultancy, participated in an international seminar where an Australian alliancing consultant, Jim Ross, gave an influential presentation and showed excellent project results for the alliancing model. The interviewees reflected that this was the key driver for change in thinking: The excellent results from Australia, presented convincingly by a person who had witnessed them in practice, supported the valorization of project alliancing as a governance model and demonization of the fixed-priced contracts. After the conference, Jim Ross gave several presentations about the project alliancing governance model to various audiences in Finnish industry seminars. This way knowledge from project alliancing was disseminated to a wide range of industry representatives, who then started visioning what alliancing would mean in Finland. The presentations emphasized the relational governance practices as well as supported the specification of the cognitive concepts related to project alliancing and the questioning of the cultural foundations of the conventional project governance models. The collaboration with Jim Ross and AC was strengthened, creating also a highly important knowledge resource base for Transportation Agency (TA).

Contextualizing the project alliancing model and solving contractual governance challenges

The contextualization of the collaborative governance model to Finland's infrastructure sector started in June 2010 by TA, supported by the AC and Jim Ross. At the time, however, many individuals within the field doubted the concept of project alliancing, viewing the organizing and collaboration approach as too idealistic. Jurisdictional work focused on developing the contract and examining the possibilities of contractual governance under EU procurement legislation. At this time, legal consultation in relation to the EU's public procurement legislation and the applicability of the alliance fees as a price component were also being conducted. Lawyers were investigating the procurement process from the regulation point of view, but no indication that the law would be broken was found; however, they needed boldness to test and stretch the field-level regulatory boundaries in terms of the European procurement legislation. Gradually, doubts about the legal aspects were eliminated.

In addition, the selection of the first pilot project, Project A, was done with care and with a highly strategic orientation: TA wanted to make sure that the project would be simple and completed successfully and, thus, provide an excellent example of the collaborative governance model. Of particular interest was the intentional framing of the first institutional project as a shaper of relational norms and trust as the key governance practices: “The vision was that the projects should be collaborative and a “new opening for the whole field.” At the same time, strategizing for the series of alliance projects was conducted. The aim was to select a significant, highly visible and complex project as the second institutional project to be able to show that the governance model could deliver significant value compared to conventional project governance models.

Building sector-level capabilities and commitment to the collaborative governance model

In addition, coaching for industry and market preparations for the collaborative governance model was organized and the call for tenders was published in November 2010. Many organizations reported that they had organized their own internal preparations and self-initiated capability development processes even before the call for tenders based on public information. In addition to searching for knowledge and practicing alliance collaboration practices through case exercises, the preparation processes within the companies entailed sense making and reflecting processes that focused on the philosophy and behavioral requirements of project alliancing. Institutional work in this stage was focused on educating the actors with skills and knowledge necessary to support the collaborative governance model.

Institutional work through consecutive institutional projects (2010–2020)

After the preparation phase, three consecutive institutional projects were implemented. These projects acted as arenas for institutional work, where the actual development of the governance model and its contractual and relational practices took place in the daily project work. The consecutive institutional projects also featured shifts in the focus of institutional work, which resembled the gradual fine-tuning of the collaborative governance model to fit with the institutional context. The projects partly overlapped, facilitating the transfer of learnings and continuation of institutional work from one project to the next. The focus of the institutional work in the three institutional projects related to the governance practices are summarized in Table 3.

Clear shifts in the mode of institutional work shaping the governance practices of the model were visible from one project to the next. In Project A, the actors engaged in jurisdictional work to develop contractual governance practices, especially the price component. Enabling work was also related to the creation of support institutions such as the independent actors to monitor cost accumulation and ensure compliance. Institutional work related to the development of contractual governance in project A was also mimicking the practices and contractual content from Australia by the book to facilitate the adoption. Similarly, institutional work related to relational governance was driven by the direct replication and adoption of relational rules from the Australian alliance model that facilitated and supported the new collaborative ways of behaving.

Drawing on the lessons learned from project A, in Project B institutional work focused on developing project governance arrangements that combined ideas from lean practices and integrated project deliveries with the Australian project alliances. Lean practices, such as Big Room and Target Value Design that facilitated development of joint relational norms and trust as well as effective collaborative working were infused into the governance practices in Project B. The rationale for such institutional work was in linking the ideas of the governance model with the popular and legitimized ideas of lean thinking. This work contextualized the project alliance model and its practices to the specific industry, associated the model with the legitimized values and existing sets of taken-for-granted practices and therefore increased the legitimacy of the model. Based on experiences in Project A, contractual governance was fine-tuned, particularly regarding the commercial model, for example, by adding public image as a key performance measure and integration of a larger set of subcontractors in the joint performance measurement.

Finally, in Project C, the emphasis of institutional work clearly shifted from contractual governance to the development of relational governance from the perspective of internalized joint values and engagement of the project personnel in the definition of project identity and collaborative practices. Emphasis was especially on reflecting and elaborating what cognitive concepts and the values meant in practice and in the participants' day-to-day routines and on how collaborative values could be jointly developed based on the orientation of the personnel. Furthermore, flexibility in terms of following the “formal” project alliance practices was emphasized in Project C in order to adapt the relational practices to the needs and goals of the project audiences. For example, values and behavioral norms were constantly evaluated. These developments resemble the idea that institutional work was modifying and shaping the cultural-cognitive taken-for-granted values related to collaboration between the parties.

Links between the institutional projects and the field-level institutional work facilitating institutionalization of the collaborative governance model (2014–2020)

While the institutionalization of the collaborative governance model would not have progressed without the institutional projects, significant institutional work was also required at the institutional field level. Clients and service providers carried out institutional field level work in the development programs initiated, driven and directed by the developments and experiences in the institutional projects. These programs were initiated to enable the field-level institutional change and to share and spread knowledge gained from the institutional projects to a wider industry-level network. The institutional projects also enabled the legitimization of the new governance model at the institutional field level by providing ideas and knowledge to the field-level development programs and this way directing the content of the field-level institutional work. Consequently, institutional work at the field-level inter-organizational networks and committees was tightly connected to the institutional projects.

Towards the end of the first institutional project, AC and the leading public procurers initiated a research and development program. First, IPT1 program (2014–2016) where the focus was on developing closer collaboration between the clients, facilitating collaboration and deconstructing such project delivery models that support zero-sum games. TA was a key player in this project and the AC organized and facilitated regular meetings within this group in order to transfer learnings from the first alliances to other clients. Institutional projects A and B were used as example projects and lessons from them were shared among 11 clients.

Later, continuation programs IPT2 (2017–2019), IPT3 (2020–2022) were initiated with the objective to develop project governance models further, to challenge the market, develop value generation in projects, develop productivity significantly during project execution and to develop people and their capabilities. Lean thinking including Big Room, Last Planner, Target Value design was also at the heart of the programs that included 13 clients and where learnings from Project B and C were shared. The programs included workshops and seminar series, combining training and education, implementing the developed tools and models in practice and sharing of the lessons learned. These events were characterized as a platform for co-operation of the leading procurers, through which the “cultural change of the industry can be influenced.” According to the program representatives, hundreds of professionals who participated in the events and projects have taken the learnings forward and into practice.

The service provider side also initiated industry-level development programs to facilitate institutional work at the field-level (LCIFIN, RAIN1 and RAIN2). Also, these programs were promoted and coordinated by the AC. The aim was to share experiences and research results from project alliancing, enable continuous improvement and standardization of relational practices and provide best practice examples from the institutional projects. The institutional projects were used as sources of knowledge within the field-level development programs that aimed at standardizing and institutionalizing governance practices and the collaborative governance form. The themes of the service providers' development program seminars varied but were focused primarily on the implementation of lean thinking in project alliances and in the development of the relational practices and values. The participants of the seminars were referring to themselves as the alliance “evangelists” that are spreading the positive message of alliances and saw it as their responsibility to legitimize the model through promoting its superior performance in their networks when compared to more conventional project governance models. In addition to the clients and service provider's development programs, also a field-level program committee started its work after the first institutional project in order to standardize and formalize the project alliance special contract terms and worked on these between 2015–2020.

The links between the institutional projects to the field-level institutional work in the development programs are described in Table 4.

A process model of the institutionalization of a new collaborative governance model

How does a collaborative governance model become institutionalized? The model in Figure 2 is a simplified, synthesized portrayal of the institutionalization process over time. The model is grounded in our empirical data and highlights the institutional work that was associated with the institutionalization of the governance model and its contractual and relational practices in the infrastructure sector. The institutionalization of a collaborative governance model progressed and unfolded through institutional work before and during consecutive institutional projects and field-level development programs driven by those projects.

The preparation phase featured various forms of institutional work directed at developing and institutionalizing the collaborative governance model with contractual and relational governance practices. After questioning the established governance models to manage complex projects and identification of new solutions, the focus of the institutional work shifted to enabling work, including international networking and establishment of new actors with unique resources. Then theorizing, which included the development of new cognitive concepts and valorizing of the alliance model was carried out. This was followed by contextualization and jurisdictional work as well as through appealing to the field members by framing the upcoming institutional projects as field shaking. Finally, educational work was enacted to support the implementation of the new governance model. As can be seen, institutional work in which the central industry actors engaged before the institutional projects was simultaneously directed both at the development of contractual, i.e. regulative institutions and the normative and cultural-cognitive institutions related to relational governance. Together this pre-project work formed the momentum for change and enabled the institutional work carried out in the consecutive institutional projects.

Then, the three institutional projects featured institutional work related to the development of the contractual and relational elements of the collaborative governance model. The institutional work in the first institutional project primarily focused on the development of regulations and contractual governance formats through mimicking the Australian practices. As the contractual model proved its effectiveness in the first institutional project, more attention was directed to the relational governance practices that were seen to facilitate the development of relational norms and trust in the second institutional project. In this project, the actors aimed at better contextualizing the new governance model to the industry by attaching and merging it to the legitimized lean philosophy practices and fine-tuning both contractual and relational governance practices. This approach resembles the creation of hybrid combination and employs a bricolage process where the original Australian governance framework was reinforced with lean ideas that were already locally validated. Finally, institutional work in the third institutional project was directed toward changing the cultural-cognitive elements that were related to relational governance practices. The shifts in the forms of institutional work were enabled by the horizontal linkages between the temporary projects which ensured the continuation of the institutional work.

The institutional projects also initiated collective institutional work in the form of development programs by the clients, service providers and the contract committee at the field-level, which was crucial for the standardization and legitimation of the model. The content of this work followed and was affected by the institutional work at the project-level and it was primarily focused at codifying, communicating and legitimating the new contractual and relational governance practices of the collaborative governance model. Institutional work at the field-level development programs and their professional networks ensured the codification and standardization of the model and its templates, enabled communication of the models' positive results to a wider audience and industry networks and validated the model beyond the participants of the institutional projects.

Overall, the institutionalization of the collaborative governance model was a process that progressed through the projects' and the field-level institutional work and was facilitated by the horizontal links between the institutional projects as well as vertical links between the institutional projects and the field-level development programs. The horizontal and vertical links played a central role in enabling the continuation of institutional work and exchange of knowledge about the governance practices and realized in the form of informal encounters (groups, professional networks), joint personnel and alliance leadership team members, seminars and knowledge exchange meetings, impersonal mechanisms (such as exchange of documents and value for money reports) and joint clients' alliance consultancy in all the projects and their representatives in the industry development programs. The links from the institutional projects to the field-level development committees were important in advancing the change in the field-level regulations and developing the model in the field-level development programs so that it could be considered as legitimate and taken-for-granted in the eyes of the industry stakeholders. Based on our evidence, the role of the alliance consultancy was highly relevant in engaging in institutional work and institutionalizing the governance model: taking the contractual development needs forward to the next project, in translating relational governance practices from one project to another and in driving the institutionalization of the governance model at the field-level through coordinating the industry-level development programs.

Contribution and implications

The study provides the following contributions. First, the study provides further understanding of the governance of IORs (Chakkol et al., 2018; Lewis and Roehrich, 2009; Roehrich and Lewis, 2014). We complement these studies on relational and contractual governance by illustrating a specific type of collaborative governance model (project alliancing) and its institutionalization at the field level. Prior research has paid very limited attention to the evolution of the governance models across projects and particularly to the institutional projects in which actors engage in institutional project work. As the findings indicate, the institutionalization of the collaborative governance model was supported by the development of relational and contractual governance practices through diverse institutional work. In this way, the study also provides contextualized understanding of project alliancing; the findings give more detailed understanding of how alliances can be managed, providing also insight into diverse interpretations of the differences of relational project procurement forms, including project partnering, integrated project deliveries and project alliances that remain (Walker and Lloyd-Walker, 2015). The study also complements existing research on alliance management capability in the project context (Schilke and Goertzen, 2010).

Second, the study provides further understanding of large, contemporary complex projects and their management on how their governance models may be institutionalized in a mature sector (Aaltonen and Turkulainen, 2018; Artto and Turkulainen, 2018; Geraldi et al., 2011; Holweg and Maylor, 2018; Maylor and Turner, 2017). Toward this end, we illustrate the intentional role of projects and institutional project work as inducing change in the ways of working in an industry sector. Our results suggest that the project actors first engage in institutional work to develop the contractual governance practices, after which work is directed to efforts to contextualize the governance practices and develop the relational governance practices further. Consequently, a more sophisticated insight into explaining the role of institutional work and its dynamics in advancing the standardization of collaborative models is provided (Bygballe and Swärd, 2019; Chakkol et al., 2018). Without sustained and linked institutional work at different levels and by various actors, collaborative project governance models may remain as solutions within single projects. This may explain why the adoption and development of collaborative governance models has failed in some contexts and why there are a number of variants (Lahdenperä, 2012). The findings also highlight the importance of developing trust and social capital to facilitate the management of complexity in projects. Moreover, we respond to the call for more OSCM research on challenges in managing public projects and programs (Mishra and Browning, 2020).

Third, the findings also provide further understanding of how project governance models become institutionalized in fields that are characterized by temporary organizing. Hence, we respond to the call to adopt an institutional lens to better understand the management and governance of large projects (Matinheikki et al., 2019; Winch and Maytorena-Sanchez, 2020). The process model on the institutionalization of a collaborative project governance model points to the importance of institutional work required to create momentum for the institutional projects, where the actual governance model is implemented. Our findings also suggest that a series of institutional projects is needed as a context where the contractual and relational practices and the governance model are developed through institutional project work. Furthermore, different forms of field-level institutional work initiated by the institutional projects are also required to institutionalize the model within the industry sector. The collective institutional work at the field-level upholds the developing new governance model and ensures that it is communicated, codified and legitimated within the wider industry network. The links between the projects and the field-level development programs also played a central role in facilitating change and in building the momentum for the model. Our process model therefore suggests how varying, temporal and sustained institutional work is required both at the level of projects and field for a new project governance model to become institutionalized in fields characterized by project-based organizing. This way the findings extend the studies on the role of institutional projects in advancing change and bring attention to the temporal and dynamic dimensions of institutional work (Manning and Hagen, 2010; Maoret et al., 2011; Tukiainen and Granqvist, 2016; Winch and Maytorena-Sanchez, 2020). The institutional projects reflect the notion of vanguard projects in that they are pioneering, explorative projects (Brady and Davies, 2004; Frederiksen and Davies, 2008; Laurila and Ahola, 2021). The findings extend and illustrate vanguard projects in the context of large inter-organizational projects and the field-level from an institutional change perspective. Managerial guidelines can also be drawn from the developed institutionalization process model on how to move away from traditional arm's length collaborations and to facilitate the adoption of collaborative project governance in the infrastructure and construction sectors.

Limitations and future research

The study has several limitations. The research was conducted in a specific institutional field in Finland. However, the mature nature of the investigated industry sector and the rapid institutionalization of the project alliancing governance model made the processes related to institutional change and institutional work relatively transparent to examine. Therefore, the investigated institutional field was ideal for theorizing as it offered a platform for examining how institutionalization of a governance model took place. However, this specific context is a boundary limitation of the study. Future research on the influence of contextual factors on the development and institutionalization of the governance model would be beneficial, including the effect of field-level structures and industry conditions, national contexts and nascent and emerging fields. In addition, this study depicts a highly successful institutional change process—at least to date. Creating a comparative set-up, including failed attempts to institutionalize governance models in project-based industries, would be highly beneficial in developing further understanding of how institutional change is produced and why the process is successful.

We made the intentional decision to focus the study on institutionalization of the project alliancing as a collaborative project governance model. The model is heavily concentrated on promoting collaborative behaviors and working practices, posing limitations for the generalizability of the findings regarding the development of contractual and relational governance through institutional work. It is likely that the collaborative governance model has attracted such actors that have alliance capabilities to engage in institutional work in the first place. Future research could complement this study by focusing on other types of project governance models and institutionalization processes to uncover differences and similarities across the different types of changes. Future research could also examine how the institutionalized collaborative values regarding project alliancing may produce extended collaborative shifts within the institutional field and change working practices and processes in traditional project governance models, in which adversarial culture has been taken for granted. Similarly, future research could examine the general collaborative shift in governing large projects and study the institutionalization of other types of collaborative governance models. Research on the tradeoffs in terms of institutional work and mechanisms of contractual and relational governance and contextual factors affecting their effectiveness would also be highly valuable for both theory and practice. Furthermore, understanding what kinds of different steps organizations should take to develop templates and contract terms further in different contexts would be managerially relevant.

Finally, although we collected data over a long period and at different points in time, we still needed to rely on interviewees' descriptions and memories of the events during the preliminary stage before the institutional projects. As always, the informants' memories are prone to retrospective bias. To manage this challenge, we collected as much secondary data as possible from public press, industry reports, presentations, research reports and other types of documents. However, further empirical research should be undertaken to elaborate these findings.