رسمی سازی مدیریت پرتفولیو پروژه: نقش تعدیل پیچیدگی پرتفولیو پروژه
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|21976||2012||12 صفحه PDF||سفارش دهید||7690 کلمه|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : International Journal of Project Management, Volume 30, Issue 5, July 2012, Pages 596–607
Companies frequently implement formalization to improve success. Previous research has found supporting evidence for the performance-enhancing effects of formalization in both single project management and project portfolio management. However, there is no research on how formalization at the project level interacts with formalization at the portfolio level, or on how this interaction may impact success. This study investigates the interaction of formalization at both levels and examines the moderating effect of project portfolio complexity on formalization. Using a sample of 134 firms, this study shows that single project management formalization and, likewise, portfolio management formalization are directly connected to portfolio success. Simultaneous formalization at these two levels delivers a complementary effect, resulting in an increase in success that is more than additive. A contingency analysis confirms that the proposed positive effects become more prominent if complexity is high. Complexity measured as project interdependency has a stronger moderating effect than complexity measured as portfolio size.
Formalization is a central construct in organizational theory and is recognized as a central element of bureaucratic regimes (Weber, 1922). Many studies have shown a positive relationship between formalization and organizational performance (Nahm et al., 2003 and Pearce et al., 1987). The drivers and impact of formalization were first studied for permanent organizations, which are founded for an unspecified period with the goal of long-term performance for their stakeholders. More recently, researchers have investigated formalization in the context of the temporary organization “project” ( Lundin and Söderholm, 1995) and found that the formalization of single project management is connected with project performance ( Liu et al., 2008, Milosevic and Patanakul, 2005, Na et al., 2004, Nidumolu, 1996 and Payne and Turner, 1999). However, there is little research on the interplay between the formalization of permanent and temporary organizations. The present study integrates both views by analyzing the formalization of single project management and project portfolio management, a subsystem of the permanent project-oriented organization. Single project management (SPM) formalization includes the definition and implementation of standard tools (Milosevic and Patanakul, 2005), established standards (Nidumolu, 1996), defined procedures and processes (Dietrich and Lehtonen, 2005), tight controls (Liu et al., 2008), and consistency across single projects (Payne and Turner, 1999). As the number of projects increases, it is particularly important to guarantee effective and efficient execution of project portfolios. This remains a challenge despite the formalization of single projects, which facilitates faster process implementation and better process quality (Ahlemann et al., 2009 and Garcia, 2005). Cooper et al. (2001) emphasize the importance of a well-structured and consistently applied process for project portfolio management in new product development. Consistency of processes facilitates the management of interdependencies between projects and the comparison of divergent projects (Cooper, 2008). While companies are keen to invest heavily in education and (re-)certification of their project management professionals and to make use of external guidelines supplied by professional project management organizations to establish standardization, the return on these investments in formalization remains uncertain. Martinsuo and Lehtonen (2007) suggest that empirical research should link project management practices such as formalization to the portfolio level to increase efficiency in managing project portfolios. De Reyck et al. (2005) support this claim by noting that respondents who implemented the formalization of single project analysis improved their performance within the project portfolio environment. However, literature on the connections between the project and the portfolio level is scarce. So far, the construct formalization has been considered only at the single project level, and no study has analyzed the combined and interacting effects of formalization at both levels. To address this gap, we differentiate and measure project portfolio management (PPM) formalization. In this paper, we argue that the degree of formalization of single projects is an organizational variable that enables the implementation of project portfolio management and increases its positive impact. The definition and implementation of a formalized project portfolio management process also increase and reinforce the formalization of the single project management process. Despite the merits of formalization, over-bureaucratized systems may paralyze organizations and increase organizational inertia as well as resistance to change. To understand the specific conditions that support the positive effects of formalization, it is essential to adopt a contingency perspective when investigating the effectiveness of formalization (Burns and Stalker, 1961, Dietrich, 2007 and Donaldson, 2001). Various characteristics, such as the size, composition, or innovativeness of projects in the portfolio, may influence the effectiveness of formalization. However, most studies do not take contingencies into account. This study considers the individual portfolio's condition by examining the effect of the complexity of a project portfolio on the link between formalization and portfolio success. Project portfolio complexity is of particular importance in the context of project portfolios (Söderlund, 2004 and Stummer and Heidenberger, 2003) because a larger portfolio and interdependencies between projects pose challenges for the manageability of project portfolios. This paper addresses the following research questions: How do the formalization of the single project management process and the formalization of the project portfolio management process influence the success of a project portfolio? How do the two types of formalization interact with each other in their effect on performance? How is the influence of formalization moderated by the complexity of the project portfolio? By addressing these questions, this study contributes to the literature in several ways. First, we provide empirical evidence for the existence of a positive relationship between single project management formalization and project portfolio success. Thus, we corroborate the claim that the standardization of single project management practices is related to project portfolio success. Second, we show that simultaneous formalization at both levels has a complementary positive effect on the quality of the execution of the project portfolio management process. We emphasize that single project management formalization is a necessary but not sufficient condition for project portfolio management quality (PPM quality). Third, we show that formalization becomes even more important for more complex portfolios (i.e., larger project portfolios and portfolios with highly interdependent projects), thus confirming the need to consider contingency factors in project portfolio management research. Fourth, we show that the relationship between formalization and portfolio success is fully mediated by the PPM quality. This finding provides additional insight into the mechanisms by which formalization affects performance and explains why complexity has a positive moderating effect.
نتیجه گیری انگلیسی
This study examined formalization in a project portfolio environment. We differentiate between single project management formalization and project portfolio management formalization. Both types of formalization configure standardized routines and processes. However, the former does this to manage projects and the latter to manage whole portfolios. Thus, two distinct levels of formalization are analyzed, and their joint impact on PPM quality and project portfolio success is considered. The results show that both types of formalization are independently associated with increased PPM quality and, consequently, project portfolio success. Thus, formalization of both single project management and project portfolio management improve transparency in a project portfolio environment as a result of the increased availability and comprehensiveness of information. Furthermore, formalization is connected with the speed of resource allocation and the reliability of commitment, and it reduces conflicts in resource endowment. Empathy and willingness to help fellow project managers and project teams is also increased. More importantly, we find that joint formalization at both management levels impacts PPM quality even more strongly. Therefore, the positive effect of one type of formalization is strengthened when the other type increases. This integration of the micro and macro levels in formalization answers the call to examine the interface between single project management and project portfolio management (Martinsuo and Lehtonen, 2007 and Söderlund, 2004). Our study highlights the importance of the interaction between the single project and project portfolio level in line with Martinsuo and Lehtonen (2007). Furthermore, we extend their findings by showing the interaction effects between the two types of formalization, the mechanisms by which formalization affects performance, and a contingency perspective. We find that the effects of formalization are completely mediated by PPM quality. Finally, the results suggest that the positive effect of formalization is moderated by project portfolio complexity. With rising complexity, the benefits of formalization become even stronger. Drawing from these results, this study contributes to the literature on project and project portfolio management in several ways. First, the results of this study suggest that formalization that is implemented solely at one level, without provisions for the other, has an inferior effect. Thus, it is necessary and strongly recommended to establish formalization at both management levels simultaneously and to integrate these mechanisms with regard to context. Second, the tested framework offers a deeper understanding of the performance impact of formalization. The mediating effect of PPM quality explains the mechanisms by which formalization affects project portfolio processes and, consequently, their performance. Thus, the present study provides insight into what these mechanisms are and how they function. For example, formalization at both levels is positively associated with transparency across the project portfolio, which, in turn, facilitates the appropriate allocation of resources. Hence, the overall cooperation between projects may be improved because the reasons for conflicts and resource haggling are reduced. This situation has direct consequences for the overall success of the portfolio. Third, by adopting a contingency perspective on formalization in project portfolios, the results suggest that formalization becomes even more important for success in more complex portfolios. This finding is validated by the fact that it does not matter whether complexity is measured by portfolio size or project interdependency. These results imply that formalization is not an end in itself but rather must correspond to the specific requirements for the complexity of the individual project portfolio to achieve an optimal level of success. In other words, there is no single method of formalization that fits all portfolios (Chenhall, 2003). Thus, the portfolio size and the project interdependencies between the individual projects in the portfolio must be carefully considered. This study has implications for the theory and practice of project portfolio management. Research on formalization is substantially complemented by the conceptualization of two distinct types of formalization in a project portfolio environment. The interaction effect demonstrated between these two kinds of formalization illustrates the need for comprehensive and integrated formalization. Therefore, we suggest that single project management formalization fundamentally belongs to project portfolio management formalization. Future studies should consider this interaction effect to ensure the accommodation of improved outcomes due to integrated formalization. A similar multi-level research design that integrates the perspective of single projects and project portfolios may be applied to other management aspects in future studies, such as distinct risk management practices for the project and the portfolio levels and their interaction. The findings on the mediating relationship of PPM quality may also be useful in future studies. For example, future analysis may consider the role of PPM quality in the relationship between project management offices, another mechanism to formally coordinate the steering of project portfolios, and project portfolio success. Finally, the results of this study emphasize the importance of contingency factors in single project and project portfolio management (Howell et al., 2010). In this context, other aspects of portfolio content might be relevant. For example, when high levels of creativity are required (as is the case in R&D activities), formalization may systematically create barriers to innovation and reduce opportunities for creativity (Bonner et al., 2002, Mirow, 2010 and Sethi and Iqbal, 2008). This situation will eventually reduce success and discourage key innovators. Salomo et al. (2007) show that uncertainty measured as innovativeness negatively moderates the performance impact of the formalization of new product development projects. Thus, the formalization of R&D project portfolios needs to be carefully administered to prevent these adverse effects. No clear guidelines can be offered for project portfolios that are both complex and highly innovative because the complexity and innovativeness of the two task conditions have conflicting implications, depending on the strength of the moderation effects and the interaction of these conflicting contingencies. For theory building, it is therefore very important to avoid bundling these task characteristics under a wider umbrella construct (Howell et al., 2010). Instead, focused constructs must be defined and the interdependencies between their moderating effects analyzed. Future research should address such conflicting contingency aspects and analyze how other task characteristics interact with project portfolio complexity. Different types of managers in project portfolio management may benefit from this study. Practitioners may benefit most from applying the finding that both types of formalization must be implemented simultaneously and in an integrated fashion to achieve the highest process quality. This includes acknowledging the reduced effectiveness of formalization at only one level of management. First, designers of project portfolio management systems are advised to define and to integrate single project management formalization in accordance with project portfolio management formalization because the former is the basis of harmonious formalization. Second, supervisors or coordinators of project portfolios are advised to apply well-structured and consistently configured processes, tight controls, and standard tools for the respective levels of management. Furthermore, these coordinators must ensure that all stakeholders closely adhere to the formalization requirements of both levels to yield the positive interaction effect of joint formalization. Benefits for these practitioners include operating processes in an integrated manner, making better decisions in critical situations (e.g., at the gates of a formal approval process) and achieving faster process implementation, better process quality, and higher quality results congruent with portfolio goals (Ahlemann et al., 2009 and Garcia, 2005). Third, the information on the relevance of contextual factors for formalization may have managerial implications. Less complex project portfolios do not profit as much from a high degree of formalization. Thus, a high degree of formalization might not be necessary due to the excessive cost incurred for set-up. In certain cases, the implementation of highly formalized processes might incur more costs than benefits (Ahlemann et al., 2009). A few limitations need to be pointed out when interpreting the results of this study. First, PPM quality and project portfolio success were measured in the same time period. Thus, there may be a risk of halo or attribution bias because successful portfolios are automatically considered to have high quality processes, and vice versa. Therefore, the true relationship between PPM quality and project portfolio success might be lower. However, this relationship is not the primary focus of this study, and previous longitudinal studies have shown that PPM quality positively influences project portfolio success in later periods (Jonas et al., 2010). Second, a potential risk of common method bias cannot be excluded. However, precautions have been taken by carefully collecting information on key informants in project portfolio management, guaranteeing anonymity to the informants, and assuring the informants' evaluation competency (Podsakoff et al., 2003). Third, this study focused on German firms, but formalization may be handled differently in other regions, such as Scandinavia, where less emphasis is placed on processes than on actors (Ahlemann et al., 2009 and House et al., 2004). Thus, future studies may build upon our findings and contrast practices in other cultural contexts. This would be especially beneficial for multi-national organizations that seek to equalize standards throughout their business (Clarke, 1999) or companies in cross-national, post-merger integration exercises.