Project-Based Organizing and Strategic Management: Volume 28

Gino Cattani is currently associate professor of strategy and organizations at the Stern School of Business, New York University. He received an MA in management science and applied economics from the Wharton School at the University of Pennsylvania in 2001 and a PhD in management from Wharton in August 2004. His research focuses primarily on firm heterogeneity, technological change, and micro-determinants of industry dynamics, and recently on the social-structural determinants creativity. His research has been published in the Administrative Science Quarterly, Industrial and Corporate Change, and Organization Science. He has been an active member of the Academy since 1999. He is a member of the editorial board of Strategic Management Journal, and Strategic Organization.

The last several years have witnessed a growing scholarly interest in project-based organizations. This interest mirrors the diffusion of this organizational form across a wide range of industries, well beyond those where organizations traditionally have been organized by projects. To date, however, research on project-based organizations has not yet offered a systematic investigation of the interactions between project-based organizing and strategic management research. An examination of the existing literature indicates that some of the answers to key strategy questions remain incomplete, at times contradictory, and at best ambiguous. This volume moves the discussion to the next level by offering a comprehensive yet integrated view of cutting-edge research on project-based organizing to shed light on some of these ambiguities and clarify the relationship between project-based organizing and strategic management. To accomplish this, the volume includes the contributions of several leading scholars who have been active researchers on this subject. The chapters develop and extend key strategic aspects of project-based organizing, raise many new important questions, and identify fruitful areas for future research.

In this chapter we put projects at the centre stage of firms' activities – i.e. product and process innovation, strategy formulation and implementation, capability building and learning, organizational structure and design, and systems integration (the capability to combine diverse knowledge bases and physical components into functioning systems). Based on the findings of a 10-year research programme into firms producing high-value capital goods – known as complex products and systems (CoPS) – we draw out conceptual insights about project organizing that can inform and contribute to the development and reformulation of more universally applicable formal theories of strategic management and organization.

This study examines the variety of cooperative strategies used to organize the international co-production of motion pictures. Motion picture production is a high-goal singularity, project-based industry in which the structure of relationships between companies involved in cooperative strategies is highly visible. Working from existing theories of co-production and drawing on the strategic joint ventures literature, I examine archival data, first for evidence of the strategies predicted by theory, and then for project participation strategies that theory does not account for. I identify four strategies on the basis of the ways that firms participate in international co-productions. A large number of relatively short-lived firms enact strategies of supplying resources and skills to the persistent firms dominate the industry. Two types of persistent firms cooperate with both direct competitors and complementors but pursue different markets, whereas a third type avoids cooperation with peers. The observed strategies constitute a hierarchy of strategic roles, and thus demonstrate the complexity of strategic behavior involved in project-based production.

Project-based organization (PBO) can serve as a temporary organizational form in response to uncertainty or turbulent environmental conditions. An updated retrospective study of the Danish hearing aids maker Oticon illustrates the role of PBO (the so-called spaghetti organization) in guiding the company through a specific period of industry turbulence and the company leader's search for a more effective structure to organize innovation within the company. The spaghetti organization was experimental in two distinct senses. First, the spaghetti organization tested the limits of decentralization, bottom-up self-organizing innovation, and PBO. Inspired by the experience of just how dysfunctional hierarchy could become, Oticon's spaghetti organization tested the limits of nonhierarchy. And unlike the failed Brook Farm utopia of the 1840s, the utopia of radical project-based organizing at Oticon proved highly successful as a means of promoting innovation even if the spaghetti organization was not sustainable in its original form and required subsequent modification. Second, Oticon was essentially a natural experiment testing and refuting the complementarities-based claim that intermediate forms of organization which include elements of both hierarchical organization and team (or project-based) organization are inherently unstable.

This chapter compares and contrasts the diverse theoretical foundations of two paradigms in strategic project management. The first, older paradigm, draws on foundational ideas about nature (i.e., it is predictable) and human rationality (strategy and implementation are distinct) to conceptualize project management in terms of controlling predictable project processes and their inherent risks, so that project managers can optimize the trade-offs between timing, cost and quality. The second practice-based alternative paradigm conceptualizes people as sources of deterministic behavior in an otherwise often unpredictable world. Projects are key tools that are used to strategically create this predictable behavior, with project plans being used as scaffolding to help co-ordinate the distributed behavior of systemically connected people in space and time as the project proceeds. The chapter highlights how this second paradigm has a more robust scientific basis, shows how it informed the development of the Heathrow T5 project, and draws implications of for future theory and practice.

Project ventures are an increasingly prevalent organizational form in many industries. The management literature has stressed their flexibility and adaptability advantages. This chapter focuses on the learning implications of the source of flexibility most essential to project ventures: the ability to switch partners during project formation and execution. This partnering flexibility creates opportunities to respond to new knowledge about characteristics of project tasks and project partners. Partnering flexibility, however, also creates learning challenges. The short-term nature of relationships between project partners and the disintegration of the project team after project completion challenges the accumulation and transfer of knowledge to future projects. Beyond the introduction of related learning opportunities and challenges, we identify potential contingency factors in the project context that shape when partner flexibility will have beneficial versus harmful effects. On the organizational level, we propose that project-governing permanent organizations can support project-venture learning. On the industry level, we highlight potential learning benefits of standardized partner roles and coordination practices. Thus, our chapter introduces a multilevel contingency framework for the evaluation of both learning opportunities and challenges of partnering flexibility in project-venture settings. We formulate testable propositions focused on partner-project fit and project performance.

Purpose – The aim of this study is to inquire into the circumstances and mechanisms that drive temporary systems to become permanent organizations.

Methodology/approach – This study is based on a retrospective longitudinal case study (1980–1995) and informed by research on organizational path dependence. Our research object is SEMATECH, the leading global semiconductor manufacturing consortium.

Findings – This longitudinal case study of the research and development consortium SEMATECH shows how and under what conditions a project, once its initial objective had been achieved, managed to turn itself into a permanent organization, that is, it terminated its institutionalized termination. Based on our findings, we argue that the postponing of this specific project's institutionalized termination can be understood by adopting a path dependence perspective that allows for the capturing of self-reinforcing processes to account for the stability of the (once temporary) system.

Originality/value of the paper – In this chapter, we question the certainty put forward in organizational studies of projects concerning the ephemeral nature of projects due to their built-in termination mechanism.

The chapter explores project management in action in a large public research organisation – NLAT – which decided to change its internal organisation from team- to project-based organisation a few years ago. Because they focus on the realisation of a particular set of tasks for a specific client, project management practices are oriented towards optimising the process of providing clients with answers and solutions. Based on a systematic and comparative analysis of eight NLAT projects, the chapter reports technological success as project achievements, but at the same time the systematic violation of project management principles. Three elements have been identified as enhancing learning, cumulated knowledge and competencies: low project core staffing levels, which lead to the circulation of engineers and researchers around different projects; the building and managing of thematic projects and the encouragement of ‘bricolage’ as a project management style.

This chapter clarifies our understanding of the project-based firm (PBF) by sharpening the theoretical foundations of project capabilities. It emphasizes the differences between project capabilities that eliminate variance in project outcomes (to control costs and add value) and economies of scale that reduce costs across multiple projects. It also highlights how the different ways in which value is captured by project-based organizations can feedback to influence how these capabilities and scale economies are generated. This opens up new typologies of project-based organizations, with implications for theory and practice.

There has been a growing interest in the field of strategic management to understand the relationship between the organizational capabilities of firms and (a) the direction of strategies pursued and (b) the impact on competitive performance. Much of this literature has been influenced by the resource-based view of the firm. As indicated in early formulations of this theory, one implication is that the organization of resources is equally important as the resources themselves. Accordingly, the organizational and integration of resources and knowledge can be viewed as a core facet of the organizational capabilities of firms that are difficult to imitate for competitors. This paper explores a particular kind of organization referred to as the “P-form corporation” (Project-Form), its organizational capabilities and options for strategic alternatives. The chapter addresses three broad questions: (1) What are the main characteristics of P-form corporations? (2) What are the capabilities acquired and developed by P-form corporations and how are these acquired? (3) How do these capabilities vary across different strategic alternatives in the P-form corporation? The chapter concludes with a discussion about the implications for strategy and management.

Prior research on technology standardization has focused on two common patterns: processes in which product developers and other stakeholders cooperate to achieve a consensus outcome, and “standards wars” in which competing technologies vie for dominance in the market. This study examines Microsoft's responses to 12 software technologies in the period between 1990 and 2005. Despite the company's reputed tendency to pursue a strategy dubbed “embrace, extend, and extinguish,” a content analysis of news articles from the same period reveals surprising diversity in Microsoft's responses at the product level.

We classify these responses using a typology that treats “embrace” and “extend” as orthogonal decisions faced by product development organizations. This typology allows four kinds of outcomes to be distinguished, including two kinds of partial compatibility in addition to the familiar cases of full compatibility and incompatibility. To complement this cross-sectional perspective, we examine more closely the evolution of Microsoft's strategy with respect to Sun's Java technology. This longitudinal view highlights another underappreciated aspect of standardization, namely the extent to which a firm's strategic posture toward a standard can change over time, even within the same product family.

Based on this evidence, we suggest that firms tend to publicly embrace a standard with the aim of gaining legitimacy with a community of adopters, whereas efforts to extend a standard tend to be motivated by the intent to leverage the underlying technology to achieve or strengthen architectural control. We argue that legitimacy and leverage are strategic complements, making the “embrace and extend” strategy attractive to firms like Microsoft, but that the resulting outcome is unstable. Firms that pursue this strategy ultimately face a choice between contributing their extensions back to the standard and losing proprietary leverage, or giving up the legitimacy associated with standards compliance in exchange for freedom from the constraints of compatibility.

Leadership is a crucial driver of project performance. While traditionally, the project leader was considered as the exclusive source of leadership behavior, recent research indicates that particularly dispersed projects may profit from joint leadership efforts by all project members. However, leadership functions in dispersed projects are likely to differ from those in a face-to-face context. In this chapter, we specify shared leadership functions for the domain of geographically dispersed project teams with high levels of task uncertainty. Arguing that shared leadership in dispersed teams occurs through interrelation of individual and team actions, we specify a dispersed screening function as well as self-, other-, and team-directed interrelation functions and develop propositions on how these functions are related to project performance. Furthermore, we point to motivational aspects of shared leadership and discuss the role of the vertical leader in developing and facilitating shared leadership.

An emerging stream of literature has observed that project-based organizations rely increasingly on a network of collaborations originating from the ongoing process of creating and dissolving relationships that bring new project opportunities. Project-based networks are widespread in knowledge-intensive and creative industries, such as life-science and biotechnology, nanotechnology, and software, film, and music industry. This chapter examines the structural characteristics of project-based network-ties in German biotech. We focus on the consequences of local versus international network ties for the innovative success of German biotechnology firms. The findings of our longitudinal event history analysis indicate that the most valuable learning drivers are international research alliances and centrality within the international research network. Surprisingly, we do not find any local effects: neither the density of a local research cluster, nor its diversity or age is of significance. Our results shed new light on the relevance of international linkages for firms that are engaged in project-based learning networks.

We examine how digital technologies enable distributed actors to collaborate asynchronously on virtual projects. We use Wikipedia and associated wiki digital technology as the research site for our exploration. Our probe of the emergence of Wikipedia articles highlights a distinctive property of such digital technologies: in their very use, they generate a digital trace. This digital trace serves as a generative memory that facilitates ongoing cocreation, justification, and materialization of contributions from distributed actors. We examine the implications of such processes for virtual projects that embrace digital technologies with properties similar to the wiki technology used in Wikipedia.

This chapter addresses ambidexterity at the individual level. Ambidexterity is defined as a company's ability to guarantee both short- and long-term successes by simultaneously exploring new market or new technological paths and improving existing products. We demonstrate that this ability can result from the evolution of social networks linking individuals involved in idea development. We used a longitudinal approach that combined case study and social network structure analysis of the R&D center of a semiconductor company. Six cases have been selected according to the level of disruption of the first idea generated and the end result in terms of exploration and exploitation. For these six cases, data have been gathered from monthly project reviews, press articles and listings of patents. Seventy-four interviews with key actors in the idea-development process have also been conducted.We mapped the relationships between actors who have contributed to the development of the idea through creative thinking and/or helped it to be accepted both internally and externally over three-year windows. Consequently, two network pictures are drawn for each case, and network structure indicators are computed for these two representations. We created a description of network evolution and the consequences of this process on the level of disruption of the ideas involved. This research demonstrated that different network structures and types of connections are relied upon depending on the explorative or exploitative objectives of teams of individuals.

Purpose – Over the last 15 years, a growing literature on project-based organizing (PBO) has emerged, drawing on various theoretical streams based on distinctive and sometimes conflicting assumptions. Organization-centric approaches tend to highlight projects as portfolios that provide assets to meet strategic goals, but leave un-assessed the processes by which projects evolve, are chosen and governed. Field-centric studies of PBO tend to highlight how relations among and across actors (individuals or organizations) evolve over time, but also neglect how projects meet actors’ strategic needs. We introduce a “projects as events” perspective in an effort to integrate insights from these distinct conceptualizations.

Design/methods – We review previous studies on PBO and elaborate on the theorization of a “projects as events” perspective, suggesting various reasons why it might help advance research on PBO, for example, by allowing researchers to address how projects interact across multiple levels of analysis.

Findings – By drawing on examples from the creative industries, we illustrate various instances in which projects are events: sequences of activities that unfold gradually or suddenly, and trigger distinctive networks across multiple levels of analysis.

Originality/value – A projects as events perspective facilitates the use and the combination of quantitative and qualitative methods, such as event sequencing with narrative analysis, or historical events with network analysis. By doing so, scholars may more easily cross levels of analysis by examining the various networks engaged in a project to unfold and provide a fuller understanding of PBO.

This chapter proposes an institutional framework for analysis of strategy in project-based organizations. The chapter argues that an analysis of the strategy of project-based organizations must take into account the interaction between deliberate and emergent strategic processes in this type of organizations. The chapter then goes on to argue that achieving this goal depends on addressing the ‘multicontextuality’ of project-based organizations – the fact that deliberate strategic processes respond to external environment, while emergent strategic processes are rooted in the organization's project portfolio. Based on this analysis, the chapter advances an institutional framework for analyzing project-based organizations which couples the institutional logic of the external environment, with the institutional logic which emerges from the internal ‘project field’. To explore this framework the chapter analyzes the emergence of the central-producer system in the Hollywood motion picture industry during the first quarter of the 20th century, and the role that Irving Thalberg played in creating this system.

In current research on market categories, hybridity (i.e., the association of organizations and/or the products they offer with multiple category memberships) represents an important issue with many practical implications, especially for project-based forms of organizations. This chapter explores the evolution of hybridity and the conditions under which different kinds of project-based organizations develop hybrid projects. By studying the feature film industry in the United States from 1920 until 1970, this chapter contrasts the current perspective based on status-organizing processes and suggests that hybridity is a population-level process that can be interpreted as the result of the construction and interplay of different identities, and on the dynamic of the identity dimensions employed by different actors in such effort. The chapter shows that the development and construction of the identity of a temporary organization is different from other types of organizations, and is linked to identification processes both at the organizational level, with the company or with specific individuals in key roles, and at the institutional/collective level, with pure (single-category) and hybrid (multi-category) genres. This chapter highlights the mutual interactions and constraints between these two levels in different life stages of the film industry.

This chapter advances the notion of projects of passion as a class of phenomena for which profit seeking is secondary to the pursuit of a “calling.” Drawing on a comparative case analysis of seven temporary art projects realized over 35 years by renowned artist-entrepreneurs Christo and Jeanne-Claude, it defines a theoretical model of the unique elements and aspects of the process through which projects of passion unfold. In the model, freedom and novelty are singled out as unique drivers of project motivation, individual business models and rhetorical strategies as process mechanisms, and authenticity and impact (the aesthetic, social, and economic value appropriated by third parties) as project outcomes. The chapter concludes with implications for the strategic management of projects and opportunities for further research.

Andreas Al-Laham has been holding the chair for strategic and international management at the University of Mannheim since September 2009. After his studies of economics and business administration at the Technical University of Dortmund he received his PhD (1996) and Habilitation (2000) degree at the same University, Faculty of Business Administration, Chair of Strategic and International Management. From 2000 to 2002 he worked as a visiting research scholar and visiting professor for strategic management and organizational theory at the J.L. Rotman School of Management, University of Toronto, Canada. Afterward he became professor of international management and business policy at the University of Stuttgart. In 2004 he took a professorship of strategic management at the CASS Business School, City University of London, UK. Up till today, he is visiting professor for General Management and International Strategy. Between 2006 and 2009 he held the chair for management and international strategy at the University of Kaiserslautern. He has written several books, for example! Strategisches Management. Theoretische Grundlagen-Prozesse-Implementierung (together with M. K. Welge), Organisationales Wissensmanagement. Vahlens Handbücher der Wirtschafts- und Sozialwissenschaft, Praxis des strategischen Managements (together with M. K. Welge and P. Kajüter) and Strategieprozesse in deutschen Unternehmungen. His current research focuses on evolutionary dynamics in the German biotech-industry, alliances and network dynamics as well as the internationalization of SME.