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~BSTRAC!) istoricaiiy, the world of business has recognized business strategy planning,
Keywords: qualitative research; project man· We have developed an empirically based theoretical framework that shows the
agelli; pragmatic knowledge; skills development impact of business strategy o n project management- as well as the effcct of proj-
©2006 by the Project Managementlnstltute ect management on business strategy-and discusses the mechanisms used to
Vol. 37, No. 3, 98·110, ISSN 8756·9728/03 strengthen that alignment. We define this framework in rcgard to a set of well
developed concepts related to each other by state ments ofinterrelationships, state-
ments that include an integrated structure that can be used to describe phenome-
na in a manner si milar lO the concept of theory defined by Strauss a nd Corbin
lOO
(i.e., quality, time-to-market), cosl, and a co mbina- compeltltve allribules associa1ed with a customer
lion o f bo lh are o ften add ressed as a project's major focus. r:or examp le, the stntctures of p rojects AS, AUS,
objectives, constraints, and requi rements. and BS were relatively fl exible in o rder to help them
achieve their desired outco me (speed. quality, etc. ).
In sludying lhe nature of alignment, we adapled the ele- 3. Projecr process.· Project process is relalively flexible,
ments o f projecl managemen l fro m Shenhar's SPL frame- when compared to other pro jects in this s1udy, and
wo rk ( 1999 ), ele ments such as projecl strategy, mandated by its competitivc altribules o f customer
o rgani:tatio n, process, tools, melrics, a nd culture. We ado pl- focus. For example, we observed the overlapped and
ed this fra mework because it is well-publicized and tested . combi ned phases in ti me-lo-market d ifferentiation
O ur study comprised two differentimion strntegy companies (Case A); we found that the ilerative phases ensure
(Cases A a nd B), o ne costleadersllip company (Case 11 ), and the best q uality in q uality d ifferentiatio n (Case B).
five best-cost companies (Cases C. D, E, F, and G) . We coded 4. Project too/s: Time-to-markel differentiation focuses on
the exa mined project as xS o r xUS, where x represents a case, schedu ling w ols, wherein cosl lools are more flexible
S represents a successful p ro ject in 1ha1 case (pro jects AS, RS, 1han scheduling lools. Quality differentiation focuses
CS, etc. ), and US represents an unsuccessful projecl in thal o n quali1y control 1ools, wherein schedule and cosl
case (projecl AUS). 1oo ls are more flexib le 1han quali1y co ntroltools.
S. flrojec1 merrics: Projt'ct performance rneasures are
Results d irected by the compclitive attribules determined by
In this sectio n, we divide o ur findings into two subsections: 1he differentialio n stratcgy (e.g., lhe abilily of pro jecls
The nature of the align ment and the process used fo r the to meet the schedu le, featu re sets, quali1y, and fi nan-
alignmen t. cia( expectations). Similar to pro ject tools, time-to-
markct differen liation fo cuscs on scheduling metrics,
Tire Nalllre of Aligning Project Mmwgemelll tmd Busirzess Strategy wherein cost metrics are more fl exible than schedul-
First, we an aly:ce the patterns of cach o f Po rter's generi r ing metrics. Quality di ffcrentiaüon foruses on quality
stralegies in relalion to each pro ject management element. co ntrol metrics, wherein sch edule and cosl metrics are
Then, wc propose six proposilions-o ne for each projecl more flexib le than qualily contro l metrics.
management element-al the end o f each generic strategy. G. /'rojees culture: A project cu lture of lime-lo-markel dif-
Pro posilio ns fo r difl'erentimion are represented as D, propo- ferentiation is buill aro und the schedule fo cus where
sitio ns fo r cost lc>adership as C, and pro positions for besr-cost projects must b e finished al the earliestlime possible.
as BC. We a lso use co n lent an alysis lo compare cases and Therefore, a rapid ly changing environmenl is com-
d evelo p generic pro posit ions (P) that add ress individual mo n; p roject lea ms are taking risks a nd proactivcly
projecl managemen t elements withoul reference lo any spe- accelerating the p ro ject cycle time; as a result, senior
cific type of business strategy. Lastly, we explain the recipro- managers reward thcir speed . Similar ly, product qual-
ca( rel;uio nship belween pro jecl rnanagement and business ily is driving the project's culture o f quali1y d ifferen-
stralegy, discussing these as the emergent strategic feedback tiatio n; lhus, project leams communicate openly and
adapling business slralegy. exlensively to ensure 1hey achieve a h igh leve( of
pro ducl quality. Such effo rts are usually rewarded by
Pauerns in l'roject Management Elemer!Ls for Differentiation senio r managers.
Business Stmtegy Frorn these patterns we have developed six p ro posi-
l . f>rojecc strategy: General rules 10 guide the behavio r lions, one fo r each project management element:
(straleg.ic forus) o f the p roject tea ms- d esigned to O n the basis o f its compctitivc attribules, the di fferenli-
help accompl ish the goals o f differentiation- are ation stralegy generally drives the focus and conten l o f the
rooted in competitive attributes (fastli me-to-rnarket, fo llo wing:
superio r producl q uality). For exarn ple, the 1cams Proposition O 1: pro ject strategy
irnple menting projects AS and AUS were direcled by Proposition Ol : pro ject o rganizatio n
the ir sen io r managers to dro p sorne produc1 fealures, Proposilion 03: projecl process
if necessary, in lrade-o ff situatio ns so as to mainlain Proposilion 04: project tools
1he project's time-lo-markcl focus as mandated by Proposition 05: pro jecl metrics
d ifferentialion. Si rnila rly, senior managers guid ing Proposition OG: project culture
the lca m realized pro jecl BS would de lay the p roject's
sch edule by three rnonth s; as a result, they fixed the Pt11tcnrs ;, Project Marwgemem Elemems for Cose Lendersllip
fu nctio nalities so as to re1ain lhe focus and content Business Slmtegy
needed lo achieve superio r product q uality, a com- l . Projc>CL strategy: Project strateb'Y is d riven by cosl lead-
petitive atlribute of differentia tio n. ership with the purpose o f creating compelitive
2. Project orgarrization: The project o rganization tends lo advan1age through a cost reduclion (e.g., process
p ossess a high degree of fl exibility when compared lo improvement), which mayor may not lead to under-
o ther projects in this study; it is aiming 10 achieve 1he pricing the com pe1i1io n. Sch edule is importa nt
because it helps the cost leadership company save 3. Project process: The project process is standardized and
money if the project finishes o n time. bui lt on templates. Every pro ject follows the same
2. Project organiuuion: The strucrure of an o rganization's steps with a keen ern p hasis o n achieving the best
cost leadership strategy is Aexible, when it is co mpared quality, innovative features, o r desired science at the
to o ther p rojects in this study, enough to adapl toa lot minimum cost, as in projects CS, DS, ES, FS, and CS.
of change through process improvemenl so as 10 atta in 4. Project tools: Customer voice is crucit~ l for hitting the
its ultimate goal o f saving costs. cus10mer's required quality level and innovative fea-
3. Project. process: The project process o f cost leadership ture level in addition 1.0 the cost e~timates and base-
strategy is highly standardized and built on tem- lines. Other tools-for schedule, scope, and risk-t~re
plares. The observed project fo llowed the generic also used throughout the project life cycle.
steps a nd proccdures created by the organizatio n (or S. l'roject metrics: Similar 10 p roject tools, project
business unit). Because stand ardization reduces vari- progress is measured by the ability of projects to meet
ation and cost, the idea was that evel)' project fo llows o r exceed the specification of the expected products
the same steps. while still maintaining or minimiz ing expected cosls.
4 . J>rojecl wols: Schedule tools are importanL because Quality assurance, cost, and schedule rnetrics are
these help projects finish on lime, thus helping d omi nant, imporlant, and used throughout the proj-
increase cost savings. Cost estimates and cost baselines ect life cycle.
are required; Cantt charts are often used as a visual dis- 6. Project culrure: To maintain a high level o f product
play of the project sd1edule. qut~lity with a mínimum cost, the exami ned projecl
S. Project merrics: Schedule metrics are used as 1echniques culture of 1he besl-cost stralegy induded open com-
fo r tracking projects; by meeti ng target dates, o rganiza- municatio n, intensive preparatio n, trade-off consid-
tio ns can save mo ney. Cost-saving, or net present value eratio ns, and rewarding project leams for product
(NPV), is the ultimate measttre of project success. quality and cost efficiency.
6. Project culwre: Team spirit is cost-centric, focusing on From these patterns, we have outlined six propositions,
cost reduction goals and getting the job done. Sorne one fo r each projea management element:
observed attrib utes include open communication, On the bt~sis of its competitive attribules, the best-cost
Aexibility, and cost efficiency. strategy generally drives the focus and content of the following:
Proposition BCI: project strategy
From these patterns we have created six propositions, Proposition BC2: project o rganizatio n
o ne for each project managemenl elemen t: Proposition BC3: project process
O n the basis of its competilive attribules, the cost lead- Proposilion BC4: p roject tools
ership strategy generally drives the focus and content o f the Proposition BC5: project metrics
fo llowing: Proposition BC6: p roject culture
Proposition C l: project strategy
Proposition C2: project o rganization Figure 1 sumrnari.zes the configuratio n of project man-
Proposition C3: project process agement elements, as influenced by each type o f Porter's
Proposition C4: project tools business strategies tha t we have p reviously discussed.
Proposilion C5: project metrics
Proposition C6: project culture Patterns in Projecr Mmwgemer1l Eleme11ts for Porter's
Ce11eric Strategies
Pauem s in Projecl Mmwgemem Elemellts for Best.-Cosl The proposit ions presented in the previo us section are stat·
Busi11ess Srmregy ed in a way lhat is specific lo Porler's generic strategies. To
l . Project stmtegJ': The focus and coment o f pro jea strat- generalize these even more, we used a content analysis
egy are driven by the combination o f its compelitive process 10 develop generic proposilio ns that address indi·
attributes (e.g., quality. innovative, cuslomization, vidual projecl management elements without reference lo
sdence) de1ermined by best-cosl stralegy and cost. any specific type of business strategy. The content analysis
For example, p ro ject strategies of CS. DS, ES, FS, and process searched for whal the three strategic types have in
es were developed 1.0 balance customer need s (e.g., comrnon in regards to how the business strategies dictale
quality, innovation, science) and project resources. the configu ration of project management elements. The
The key is to find the level of the differentiation ata compariso n o f lhe propositions that describe how business
reasonable cost. strategy types of differentiation, cosl lead ership, and best·
2. Project organiullion: Project organizatio n is fairly flex- cost impact the project m anagement elements revealed pat-
ible, when compared 10 other projects in this study, terns: All lhree slralegic types influence p roject management
and o ften involves different fun ctions with the aim of elements thro ugh the competitive attributes that were cho -
ensuring the best quality, innovative fea1ures, or sen as a basis o f compelition for individual strategic types.
desired science, and accomplish ing this while From the patterns previously outlined, we suggest six
decreasing project cost. propositio ns, o ne fo r each project management element:
Figure 1: Summary of project management <Onfigural ion per Porler's generic strategies
Th e competitive attributes of the b usiness strategy An explicit example o f th is relatio nship is Pro ject AUS and
d rive the focus and content o f the fo llowi ng: its business strategy. l h is project's fa ilure is related to the win-
Proposit ion 1: project strategy dow o f opport un ity. Altho ugh lhe project was initially aligned
Pro p osition 2: pro ject o rgan izatio n with the organization's business strategy, the product that
Proposition 3: pro ject p rocess resulted from the project was released after the market had
Propo sition 4: project tools sh ifted ami custo mers began looki ng fo r a more complex
Pro p o sition 5: project metrics product. This project also fail ed because the project team d id
Pro p o sitio n 6: project culture not appropriately validate the p roduct defi nition (as pan of
the project's sl r:~tegy) with the key rustomers throughout its
Reciproca[ Relt1tio11sllip of IJrojecLMa rwgermmt and life cycle. As a result, Pro ject AUS failed because of ineffici ent
Business St mtegy stage gate reviews that lacked the feedb ack necessary to detect
Interest in gly, we fou nd cases where pro ject manage ment significan! lhreats, such as a mtlrket shift. The company, how-
eleme nts n o l o nly su ppo rt but also impact business ever. later adjusted its stage gate reviews 10 cover market sh ifts
strategy. We ca ll th is rela1ionship the reciproca/ relation- as a measu re 10 prevenl such failure from repeating.
ship of project management tmd business strategy. T his rel a- This ex:~m pl e implies that in order to cnsure project per-
ti o nsh ip occurs wh en co mp a nies o bta in from th eir formance, p roject managers must realign the p roject strategy,
pro jects info rm atio n a bo u t the w:~ys they :~dap t thei r 1he organizatio n and its culture, and the processes, tools, met-
bus iness stra tegy, a process th at Mintzb erg ( 1994) re f- rics of realizing projects with a project's progress. Anothcr
e red to as an enrerge111 srrntegy approach, o ne a lso kn ow n proposit ion conccrning the rcciprocal relatio nship between
as th e redirectio n o f pro jecls. project management and business strategy involves the o per-
Org.
The
Competitiva Process
A!tributes of
Business
Strategy
Tools
Metrics
Culture
• • •
• • •
• • •
·Proposilions
L---------------------------------------------------~ P7*
!__________ _ __________ __ _____ __ ____________ __ _______________________ _
Case B • One-year strategic plan • Project metrics and monthly • Gate reviews of individual projects
(four-stage product marketing, status report (project status)
product roadmap) • Project life-cycle phases
Case C • Three-year strategic informatioo plan • Project metrics and monthly • Gate reviews of individual projects
status report (project status)
• lnformation technology activity
management matrix • Project life-cycle phases
• Informal project portfolio
Case D • Three-year strategic information plan • Project metrics and monthly • Gate reviews of individual projects
• Roadmap charts status report (project status)
• Alignment charts • Project life-cycle phases
• Informal project portfolio
Case E • Three-year strategic plan (goals, • Project metrics and monthly • Gate reviews of individual projects
recommendations and reviews) status report (project status)
• Project life-cycle phases
Case F • Three-year strategic plan (goals, • Project metrics and monthly • Gate reviews of individual projects
recommendations and reviews) status report (project status)
• Project life-cycle phases
Case G • Informal strategic plan • Project metrics and monthly • Gate reviews of individual projects
status report (project status)
• Project life-cycle phases
Pattems Level1 : Mediating Process at Level 2: Mediating Process at Level 3: Mediating Process at the
the Strategic Level the Project Level Emergent Strategic Feedback Level
Strategic planning and project Processes during project planning Stage gates are the mechanisms to
portfolio management processes are and execution are the mechanisms ensure proper alignment.
the majar mechanisms to ensure the to ensure proper alignment.
proper alignment.
Case A Formal and recognized Project selection and prioritization, risk balance, strategic alignment, and
capacity management
Case G Informal and not recognized (the Project selection and prioritization, and risk balance
term is not used)
Case H Informal and not recognized (the Project selection and prioritization
term is not used)
the project was finished, the oper;J ting conditions of the A Theoreticc1l Framework: Process for Project
project had changed (the market had shifted), and there Management/Business Strategy Aligmnent
was no lo nger a place for the produrt d eveloped through To further develop the theoretical fr;~mework we proposed in
this project. In this case, the stage gate fa il ed to p rovide the section titled Nature of tl1e Project McmagememjBusiness
the organization with the info rmalion it needed to realign Strategy Alignment, we combine propositions and mediating
its process of managing the project to meet those changes. processes into a single framework. as is shown in Figure 3. The
Once thc problem was idcntif1ed at a subsequent stage propositions are used LO con nect business stratcgy and ead1
gate, the project team should have adjusted the product's project management element through statements of relation-
def1nition (as part of the project strategy). Unfortunately. ships (a two-way infl uence). Mediating processes are mecha-
the p roject team fa iled to identify in a timely manner the nisms that organizations use to <~lign p rojea management
changes that were necessary to save this project. As a and business strategy. For the sake of illustrating the process-
resu h, the team was not able to react to those changes es in general, we have used the traditional phases of the proj-
effectively. To accommod ate fo r this uns uccessful effort, ect life cycle, including conception, planning. exeo.ttion, and
the company later adjusted its stage gate reviews to cover dosing. Each company, however, uses different p ro jcct life-
m arket shift consideratio ns. cycle phases, seleding those that are most relevan! to their
The mechanism p reviously explained is a feedback industry, company culture, and o ther signifi can! issues.
loop that emerges during project execution . 1t is a result lt is the rompetitive attributes of the business strategy
that is not planned or intended but that emerges from a that drive the focus and the con tent o f the project manage-
stream o f managerial decisions through time, thro ughout ment elemen ts. The propositio ns we have o utlined in the
what Mintzberg ( 1994) ca lis the em ergent approach. 1n framewo rk describe the interrelationships between project
o ther words, the operating conditions of reviewed projects management elements and business strategy. To establish
are expected to su pport the company's business strategies and m aintain the processes used to align project manage-
by hc lping it adapt the business strategy and its competi- men t elemcnts and business strategy. we suggest that o rgan-
tive attributes to enviro nmental changes. izations use mediating processes-strategic planning and
Operating conditions refers to the actual conditions o f project portfolio management- at the strategic leve! to
project implementation, which may be equa l to those interpret their business strategy in the context of project
assumed in the project-planning phase. These may also management. Organizalions initiate and select projects for
differ from those assumed during plann ing as a conse- their project portfolio to fu lf111 business needs; they then
q uence of environmental changes in the marketplace. implt'ment a standard life cycle that includes project plan-
These changing business and p roject conditjons can be ning and p roject monitoring (the primary mediating
revealed during the stage gate reviews as well as any phase processes at the project leve!) to ensure the quality of the
of developm ent. Therefore, a combinatio n of in tended and alignment between project managemcnt elements and busi-
emergent strategies is needed to align pro ject management ness strategy. One of the majar control mechanisms o rg<mi-
and business strategy. zations use to ensure that thcir pro jens align with their
Business Medlatlng Processes PM Elements
Strategy (Focus and Content)
Stratcg1c Levcl PrOJCCt Levcl
PLC Strategy
•r Conceptual Org.
Strategic 11
1-
1
Planning 11
11
1
1
11 Process
11
: Desired Products/Services 11
r Planning
Competitiva ::- _.,. High Level+Analysis 1
Tools
! 2~E~~
Attributes ol
Business
Strategy :: Projects Are+Selected 1
Execution Metrics
1
: +
1 Project Portfolio Culture
i
1
Management Closing
1 Portfollo Review
1 1 1"
1 1 1 11
: 11 Rejected/Killed : 11
-- - -- - - - --- -- - - ---------H~ - - --- -- ------ - --1"1 ~
•rr---------------
1
,:::::::::::::::::J 11
Pr
~------------------------------------------------~
Figure 3: A theoretical framework for aligning project management with business strategy
exp ectatio ns as the project progresses from o ne project theoretical framework, as suggested by Dubin ( 1978), which
phase to the next is Lhe stage gate. This mediating process includes units/variables, laws of their interacLion, system
provides strategic feedback that can lead to wh at Mintzberg boundaries, and pro positions.
( 1994 ) caJ is emergent strategy. • Unicsf variables: The variables o r units of analysis in the
fra mework consist of two major elements: pro ject
Discussion management elements (strategy, org11nization, process,
In this study, we exp lai ned an inductive logic process-frorn tools, metrics and culture) and business strategies (dif-
specific to general practices-as a means to derive o ur feren tiation, cost leadership, and best-cost).
propositions. The general process o f developing these • Lmv.~ of lllei r i r1Lemction: Th e interaction o f variables in
propositions was based on case study research, which heav- the fra mework can be seen as a two-way influence
ily used within-case, cross-case, and content analyses. We between project management elements and business
also d eveloped detailed propositions fo r Poner's generic strategy, o ne that is perceivable through a formal o r an
strategies, which we generalized into typology-free proposi- info rmal alignment process by translating business
tions. We then developed a single pro positio n suggesting a needs into project actions and using project operating
most generic relatio nship between pro ject management ele- conditio ns to mo re effectively deploy business strategy.
ments and business strategy. • Syslem boundtlries: The boundary of the framework is
Similarly, we used inductive logic to develop an the o rganizational business units o r departments sup-
overview descri b ing the mediating processes at different lev- porting them. The pro ject m anagementf business
e ls. Our genera l process was based on our case study strategy alignment occurs within this boundary.
research and used within-case and cross-case analyses. The • Proposi tions: Seven propositions of the framework
framework resulting from Lhis an alysis explains the align- are d erived from the content analysis of multiple
ment process at the strategic level, the p roject level, and the cases. The propositions explain the unique interac-
corrective emergent feedback level. tions of each project m anagement element with the
O ur framework satisfi es the major characteristics fo r a business strategies.
Our study expands on previous, mostly anecdotal work needed is a largc sample study that focuses on the quantita-
by incorporating a rigorous theorelical approach into the tive correlations of various strategy types and project man-
proposed framework. Ahhough )amieson and Morris (2004) agement elements. The point here is to find which strategies
identified strategic planning. ponfolio management, and need which project elements 10 comribute 10 project success.
emergent approach as important stcps in the alignment
process, with information that supports this research, they References
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DRAGAN Z. MILOSEVIC, PMP, is an associate professor of engineering and technology management in the Department of
Engineering and Technology Management at Portland State University, where he has developed practica! tools and ínnovative
approaches to the traditional and current challenges of project management, and published numerous papers in management
journals. He ls a leading authority on project and program management, and has more than 20 years of e.xperíence in interna-
tional work as a project manager and distilled sorne of his theoretical ideas and practica! knowledge into an award·winning
book, Project Management Toolbax, published in 2003 by Wiley. Milosevi c earned his credentials as a project manager in the
prívate sector. managing large projects around the world. As a consultan! with Rapidinnovation, LLC, an executive consulting
company, he helps leading companies streamline their project and program management models to ensure profitabilíty. He
also conducted project management seminars for the Project Management lnstitute, where he has earned their project man-
agement professional designation of PMP. He has worked in this field ata wide range of companies including lntel, Hewlett-
Packard, Armstrong World Industries, Boeing, Daimler Chrysler, Mentor Graphics, Tektronix, Inc., lnFocus, Credence Systems,
Flextronics, WelchAIIyn, Tyco, and U.S. Sprint.
SABIN SRIVANNABOON received a PhD in systems science in engineering management from Portland State University (PSU). He
has an MS in engineering management from PSU, and BE in environmental engineering from Chulalongkorn University (Thailand).
He currently works asan NPI program manager for a hi-tech company in Hillsboro, OR, USA. Asan academician, Sabin presented
his research al well-recognized international technology and project management conferences, where many of his articles were
selected to be published as chapters in books. In addition, Sabin has published articles in lnternationa/ )ourna/ of Project
Management, Engineering Management )ourna/, and Project Manogement jaumal. Sabin was listed in the 2005-2006 "Honors
Edition" of the United Who's Who Registry of Executives & Professionals as a scholar/ professional who has demonstrated
outstanding leadership and achievement in his profession. He also won an "Outstanding Graduate Student Award" from Maseeh
College of Engineering and Computer Science, PSU.