Understanding Decision-Making within Distributed Project Teams

Project Management Institute

UNDERSTANDING DECISION MAKING WITHIN DISTRIBUTED PROJECT TEAMS

Lead Researchers:

Mario Bourgault, Certified Engineer, PhD, PMP

Head, Canada Research Chair on Project Management

Department of Mathematics and Industrial Engineering

École Polytechnique

Montreal, CANADA

mario.bourgault@polymtl.ca

Nathalie Drouin, BA in Law, MBA, PhD

Professor in Project Management

ESG Business School

Department of Management and Technology

Université du Québec à Montréal (UQAM)

Montreal, CANADA

drouin.nathalie@uqam.ca

Co-authors of the report:

Jaouad Daoudi, MEng, PhD Candidate (École Polytechnique)

Émilie Hamel, MScA (École Polytechnique)

ISBN: 978-1-933890-99-9

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Acknowledgments

This report would never have been completed without the contributions of several people and organizations, and we would like to thank them here.

First of all, we must thank the Project Management Institute for giving us the opportunity and the financial resources to undertake this research. PMI's scientific and administrative staff encouraged and supported us throughout the project. In particular, we would like to thank Edwin Andrews, Roberta Storer, Dan Goldfischer, Jean Marie Martin, and Eva Goldman. Thanks also to Dr. Klaus Brockhoff of the Wissenschaftliche Hochschule für Unternehmensführung (WHU), Germany, who acted as our scientific mentor and contact with the PMI.

Our research team brings together devoted and motivated people without whom the project would not have been such an enjoyable adventure. We are very grateful for the time and energy they invested in their tasks. First, we would like to thank the co-workers and graduate students who played such an active role in the project: Jaouad Daoudi and Émilie Hamel. Other students also made a significant contribution to the collection of data in the field. We would like to thank Caroline Gervais, Georges Réti, Chen Su, Ygal Bendavid, Marie-Claude Petit, Gabriel Yan, and Jamal Massoud.

We would also like to mention the invaluable cooperation of the Montreal Chapter of the Project Management Institute, especially the current president, Michael Kamel, the vice-president, Hélène Bénéteau, and the administrative staff. Their support was essential from the outset of the project.

While preparing the report, we also benefited from the expertise of professionals in the areas of statistics and language. Carl St-Pierre (statistician) and Margaret McKyes (translator and linguist) gave us the benefit of their outstanding competence and their sharp eyes! Our warmest thanks go out to them.

Needless to say, we are entirely accountable for the contents of this report. The results, conclusions, and recommendations are our responsibility and do not necessarily reflect the opinions of the Project Management Institute.

Mario Bourgault, PhD, PMP

Nathalie Drouin, PhD, MBA

Table of Contents

Introduction

CHAPTER 1: Overview of the Recent Literature on Distributed Teams

1.1 Introduction

1.2 The distributed project team: An expression of increasingly close collaboration between enterprises

1.3 Managing a distributed project team: Some key dimensions

1.3.1 Team inputs

1.3.2 Team processes

1.3.3 Team outcomes

1.4 Technology: A key vehicle for collaboration

1.5 Conclusion

CHAPTER 2: Overview of the Literature on Decision Making

2.1 Introduction

2.2 Overview of the literature on decisions and decision making

2.2.1 Basic decision making concepts

2.2.2 Views on organizational decision making

2.3 Specific decision making process issues

2.3.1 Decision making in work groups

2.3.2 Antecedents of decision-making quality

2.4 The decision-making process and distributed teams

2.5 Conclusion

CHAPTER 3: Conceptual Framework

3.1 Introduction

3.2 Conceptual framework

3.2.1. Characteristics of the context

3.2.2. Locus of decisions

3.2.3. Characteristics of the decision-making process

3.2.4. Degree of team distributedness

3.3 Conclusion

CHAPTER 4: How Distributed Teams Adapt to Decision Making in Practice: Empirical Evidence

4.1 Introduction

4.2 Methodology

4.2.1 The questionnaire

4.2.2 Selection of respondents

4.2.3 Sample presentation and statistical considerations

4.2.4 Determination of the distributedness index

4.3 Results

4.3.1 Roles and their influence on decisions

4.3.2 Quality of the decision-making process within the project team

4.3.3 Impact of autonomy and formalization on successful teamwork

4.4 Conclusion

Concluding Remarks

List of References

APPENDIX A: Identification of Contextual Factors Principal Component Analyses

APPENDIX B: Paper Published in PMI's Virtual Library January 2008

APPENDIX C: Article Published in Project Management Journal August 2008

List of Tables

Table 1-1Challenges to global e-collaboration

Table 2-1Decision-making processes in adaptive structuration theory

Table 3-1Description of participating firms

Table 3-2Project descriptions

Table 4-1Sample presentation

Table 4-2Deciders (roles) and project decision types

Table 4-3Allocation of decisional responsibilities by role and decision type (Cluster 1)

Table 4-4Allocation of decisional responsibilities by role and decision type (Cluster 2)

Table 4-5Project manager's influence on decisions

Table 4-6Contextual factors

Table 4-7Dimensions of the decision-making process according to geographic distributedness within the team

Table 4-8Dimensions of the decision-making process according to cultural differences within the team

Table 4-9Dimensions of the decision-making process according to the experience of team members

Table 4-10 Dimensions of the decision-making process according to the differences of skills/work methods within the team

Table 4-11 Second group of contextual factors: top management and client

Table 4-12 Dimensions of the decision-making process according to the differences of management support (MS) and involvement (MI)

Table 4-13 Dimensions of the decision-making process according to the differences of client support (CS) and involvement (CI)

Table 4-14 Dimensions of the decision-making process according to frequency of meetings

Table 4-15 Degree to which the project objectives were achieved according to the degree of formalization within the team

Table 4-16 Degree to which the project objectives were achieved according to the degree of formalization within the team

Table A1-1 Determination of the first three contextual factors

Table A1-2 Determination of four factors concerning top management and client support/involvement

Table A1-3 Determination of four factors concerning formalization and autonomy

List of Figures

Figure 1-1Input-process-output model of distributed team dimensions

Figure 2-1Multilevel theory of hierarchical team decision making

Figure 3-1Conceptual framework

Figure 4-1Distributedness measures

Figure 4-2Sub-groups as per frequency of communication

Introduction

The evolution toward distributed project management drives the need for improved processes, methods, and tools to input and share common data. The need applies across the project life cycle and among all or selected elements of the team. In our global economy, there's a growing need to decrease the time it takes to make an informed decision, to improve the team's decision velocity.

Nidiffer and Dolan (2005)

This scientific report describes a study with multiple components that our research team carried out, starting in 2006, on the topic of decision making in the context of dispersed project teams. This project represented an opportunity to explore a topic (decision making) that has not been studied much in the field of project management even though it is critically important to any project. This is all the more true today, as Nidiffer and Dolan (2005) point out in the epigraph, because projects with geographically dispersed teams are becoming the norm, and they may create additional difficulties simply due to the different places, times, or cultures involved.

Individually, the topics of decision making in organizations and dispersed teams were already the subject of several studies. Decision making has been studied for much longer, and several disciplines have an interest in the subject. The work of such authors as Simon, Cyert, or Mintzberg comes to mind, but equally relevant studies in the field of group psychology have made it possible to understand several aspects of decision making in small working groups. The literature on dispersed teams is much more recent: publications in this field started to appear in the 1990s. Although the concept of executing a mandate at a distance from the site where the main decisions are made is not a new one, the distribution of teams over several sites to conduct independent tasks, often simultaneously, represents a much more recent phenomenon. This proliferation of geographically dispersed teams is, of course, related to the meteoric development of information and communication technologies (ICT), and particularly technologies related to the Internet. Now that these technologies are performing better and becoming more accessible, companies no longer seem to be perturbed by the barrier of distance.

Nevertheless, despite the dominant discourse, work in dispersed teams remains a challenge for many organizations. Many empirical studies, some of which are summarized in the first chapter of this report, mention the difficulties related to both the execution of tasks and the relationships among individuals. Various forums and conferences are organized on this topic, and more and more publications are appearing. There is therefore a need to better understand how to adapt project teams’ current practices to improve the efficiency and effectiveness of their work. Having studied the issue for several years, we thought it would be interesting to delve deeper into the question from the point of view of decision making.

We have divided this report into four major sections. Chapter 1 presents a short summary of the literature on dispersed teams, while chapter 2 does the same for decision making. Chapters 3 and 4 present the empirical results from two main sources of information. The first source of qualitative information originates in a survey that we conducted with companies in different sectors in order to carry out case studies. The second source of information was a survey that we conducted by means of a web questionnaire distributed within the project management community. All of these data enabled us to examine this problem from several perspectives.

In the final chapter of this report, we summarize our conclusions and the empirical results and propose some avenues for future research. In Appendices B and C, we have provided additional papers that were recently published by our team in other PMI publications (Bourgault & Drouin, 2008; Bourgault, Drouin & Hamel, 2008).

After spending several months on the subject, it is clear to us that this question needs to be developed still further. We are convinced that it is important to better understand the decision-making process in project management, especially in dispersed teams. We hope that this report constitutes a step in that direction.

CHAPTER 1

Overview of the Recent Literature on Distributed Teams

In this collaborative project with a team of Australian engineers, I think we learned to better organize ourselves as a team. In the end, our approach was much more structured and effective than if we had functioned as a local team only.

Chief Engineer for an innovative technology project

Researchers from across the world and in a variety of disciplines have become interested in describing and understanding the phenomenon of distributed projects and teams. In this chapter, we review some of the most relevant studies that have appeared recently in the management literature. We limit the discussion to a small but representative portion of the current literature rather than presenting an exhaustive review. Particular attention is paid to empirical studies that provide a measure of the current situation.

1.1 Introduction

Distributed project teams are increasingly widespread. Whether they execute routine or extremely complex projects, teams are rarely located at a single site. In some respects, it could be said that this modus operandi has always existed, as customers, experts, and project managers have seldom been located at the same site. This is typical in the building industry, where construction sites are generally remote from the main project office. However, it could also be said that the economic and technological changes of recent decades have amplified this phenomenon. For example, most large enterprises have adopted offshoring or delocalization strategies, even for high value-added activities, which are deployed within a vast network of subsidiaries or independent partner companies. Major multinational companies with offices in North America, Europe, and Asia often distribute their work among specialized units, depending on the value they can add to a specific project. Moreover, the development of information and communication technologies (ICT), particularly Internet-based applications, has facilitated and enhanced the practice of distributed economic activities. It has become commonplace to exchange all kinds of information to support project execution, from technical