This article recognizes the strategic importance of project management (PM) in the corporate world through an exploration of PM/business strategy alignment. Using a case-study methodology, we extensively examined eight case studies covering nine projects in seven organizations. As a result, an empirically based theoretical framework was developed to address the configuration of PM as influenced by the business strategy (and vice versa). We found that business strategy realizes its influence on PM via the competitive attributes of the business strategy (time-to-market, quality, cost). These competitive attributes are used deliberately to determine the configuration and emphasis placed on different PM elements (e.g., strategy, organization, process, tools, metrics, culture). At the same time, PM is expected to impact the adaptation of business strategy if the operating conditions of a project detect significant threats from environmental changes (e.g., a market shift).
The alignment of strategic priorities – often referred to as strategic consensus or strategic fit – has become one of the central themes in the strategic management literature over recent years. One major stream of alignment research is that of strategic priorities across the organizational hierarchy at the corporate, business unit, and functional level. The literature suggests that strategic priorities at the functional level be aligned with and support business-unit-level strategies (further business strategies) e.g., [1] and [2]. Often mentioned are R&D, production, human resources, information technology, etc., as functional strategies; they are used as variables for examining alignment with the business strategy. Interestingly, project management (PM) is rarely seen as a functional strategy, although projects are basic building blocks of organizational strategy in many companies [3]. Only recently have researchers started to explore the alignment of PM/business strategy more thoroughly e.g., [4], [5], [6], [7], [8], [9], [10], [11] and [12], and the need for that is growing. Some recent known work related to linking business strategy and PM include PM strategy (e.g., by Anderson and Merna [8]), programme management (e.g., by Lycett, Rassau and Danson [9]), process for aligning PM with business strategy (e.g., by Srivannaboon and Milosevic [7]), project business concept (e.g., by Hellstorm and Wiktrom [10], Artto and Wikstrom [11]), strategic intention through multiple projects (e.g., by Artto and Dietrich [4], Dietrich and Lehtonen [12]), etc.
One reason the PM/business strategy alignment has become the focal attention is that companies must develop and execute innovative business strategies in order to stay competitive. In doing so, projects are often chosen as vehicles to implement those strategies, and PM is commonly considered to be an important business process [6]. In such situations, companies must make sure that projects are executed fully in line with the strategies they support. The PM/business strategy alignment helps organizations to focus on the right projects, given the objectives of the business strategy. Such alignments are challenging because the objectives of the business strategy are not always well-communicated or consistent with PM actions. Misalignment may cause an organization to lose market opportunities, and recovery from such misalignment is difficult. Understanding these alignments may be one of the major challenges to effective PM.
Scant is the empirical literature on aligning PM and business strategy. This study, however, addresses lack of information by exploring the configuration of PM elements as influenced by the business strategy (and vice versa), or what we refer to as the “nature of the alignment”. Specifically, we have developed an empirically based theoretical framework that shows the impact of business strategy on PM elements, as well as the effect of PM on business strategy.
In this study, we explained an inductive logic process from specific to general practices as a means to derive our propositions. The general process of developing these propositions was based on case-study research, which heavily used within-case, cross-case, and content analyses. We also developed detailed propositions for Porter’s generic strategies, which we generalized into typology-free propositions. We then developed a single proposition suggesting a most generic relationship between PM elements and business strategy.
Our framework satisfies the major characteristics for a theoretical framework, as suggested by Dubin [33], which includes variables/units of analysis, laws of their interaction, system boundaries, and propositions.
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Variables and units of analysis: The variables or units of analysis in the framework consist of two major elements: business strategies (e.g., Differentiation, Cost Leadership, and Best-Cost) and the PM elements (project strategy, organization, process, tools, metrics, and culture).
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Laws of their interaction: The interaction among variables in the framework can be seen as a two-way influence of business strategy on PM elements.
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System boundaries: The boundary of the framework is the organizational business units or departments supporting them. The PM/business strategy alignment occurs within this boundary.
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Propositions: The propositions of our framework are derived from the content analysis of multiple cases. The propositions explain the unique interactions of each PM element with the business strategies.
In short, this is a step toward establishing a framework of aligning PM with business strategy. In particular, the framework is contingent upon the type of business strategy, simple to understand and use, developed through iterations through a number of projects, typology-free and not restricted into any particular business strategy typology, and empirically grounded from real-world data.
