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Milosevic, D. y Srivannaboon, S. (agosto, 2008).

A theoretical framework for aligning project


management with business strategy. Project Management Journal, 37 (3) pp. 98-110. (AR22865)

A THEORETICAL FRAMEWORK FOR


ALIGNING PROJECT MANAGEMENT
WITH BUSINESS STRATEGY
~DRAGAN Z. MllOSEVIC, PMP, Portland State University]
L SABIN SRIVANNABOON, Portland State University

lntroduction
~BSTRAC!) istoricaiiy, the world of business has recognized business strategy planning,

This study addresses two aspects of a


topic under·researched in the strategic
management literature: the alignment of
H ponfolio management. and project selection as the responsibilities gov-
emed by senior managers and project planning and execution processes as
the activities performed by project managers and their project teams. When these
project management and business strat· processes are aligned, the strategic element feeds the ponfolio elemenl, the pon-
egy. Two areas of this alignment were folio element feeds the project management element, and the project manage-
studied: (1) The reciproca! lnfluence ment element feeds projects and the team's execution. But in many cases, these
between project management and busl·
processes are not aligned; as a result, o rganizations may fail to tie their projects
ness strategy, which we ca Uthe nature of
the project management/business strat· either to their business strategy orto their portfolio, which may cause them to ter-
egy alignment¡ and {2) the process used mínate the project or to continue implementing projects that do not con tribute to
to allgn project management and busi· the organization's goals, thus wasting imponant organizational resources. In
ness strategy. Then an empirically based many instanccs, organizations treat all projects in the same way, regardless of the
theoretical framework, which highlights
business strategy that the organization chooscs (Pinto & Covin, 1989; Shenhar,
the impact of business strategy on proj-
ect management-and the impact of 2001). When the organization's business strategy is translated into project-level
project management on business strate· goals, its professional uniqueness- such as speed to market, superior product
gy-as well as the mechanisms used to quality, among othcr factors- may dissolve. By understanding the challenges
strengthen these alignments, was devel· involved in aligning project management and business strategy, practitioners can
oped. This study expands on the previ-
effectively manage their projects in today's competitive environment.
ous, mostly anecdotal work, by using a
rígorous theoretical approach to develop
Scant, howcver, is the empírica] literature o n aligning projcct managernent
the proposed framework. This framework and business strategy. This study, however, addresses lack of information by
is contingent upon the type of business exploring two aspects of aligning projcct managemcnt and business strategy:
strategy-simple to understand and l . A two-way influence betwccn project management and business strategy,
use-developed through numerous proj·
one suggesting the nature of the alignment between project management
ects that are typology·free and not
restricted to any particular business
and business strategy.
strategy typology, through projects that 2. A process used for aligning project management and business strategy.
are empirically based on rea l-world data.

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

.A UG LI ST lOOÓ I I' ROJEl'T M ANA G EM ENT ) OU RNAI.


( 1998). We also refer lo the alignmenl between p ro jecl ma n- • Differentiation: O rganizations pursuing a d ifferentia-
agemen t and business strategy in relatio n to the compatible tion strategy seek to positio n lhemselves in the mar-
prio rities between an o rganizalio n's projecl managemenl kelplace with a disti nct identily that satisfies the
p ractice and its business slrategy. desi res o f their customers (e.g., fast time-to-markeL,
su perior q ua lity and seJVice, innovative fea tu res). This
Theoreticat Background d ifferentiation allows lhe o rganiza1ion lo charge a
To develo p a theorelical framework fo r aligning projecl premium price ( Po ner, 1980).
management with busi ness strategy, we examined multiple • Best-cost: U nder certa in cond ilio ns, many researchers
streams o f related literature, streams that incl ude business argue thal a comb ination o f strategies may be the best
strategy and its typology ( i.e., u nderstanding the defl nitions way of creating a sustainable competitive advantage
of business-level strategy and the conceptual basis o f differ- (e.g., Hill, 1988; Miller & Friesen, 1986; Phillips,
ent strategk types), p ro ject management (i.e., id entifying Chang, & Buzzell, 1983; White, 1986 ). In particular,
project m anagement e lements lhat sho uld be aligned with o rganizations may more effectively create a sustain-
business slrategy), and a lignmenl lileralu re (i.e., sludying able competitive advantage when they combine cost
previous and recent alignment research to identify what has leadership and differentiatio n, when they provide
been do ne and what is m issing). low-cosl produc1s and address customer val ues ( fasl
time-lo-markel, superior product q uality, etc. ).
Business Srraregy a11d Busi11ess Srraregy JYpologies
Though the definitions of business strategy vary, these-in Project Mtmagemellt
general- do focus on how lo better deal with competitio n Projecl management is a specialized fo rm o f management,
(Tse & Olsen, 1999) by mea ns o f creating competitive sim ilar 10 other fun ctio nal strategies, that is used to accom-
advantages (Ha mel & Prahalad, 1989), advantages thal p ro- plish a series of business goals, stralegies, and work tasks
vide o rganizatio ns with 1he benefits that will sustain them withín a well-defined sched ule and budget. The essence o f
when atlracting customers and defending themselves projecl management is 10 su pport the execution o f an orga-
against competitive forces (Tho mpso n & Strickland, 1995 ). nizatio n's competitive stra tegy to deliver a desired ou tcome
Altho ugh the literature d iscusses multiple business-strategy (i.e., fas t time-to-markel, h igh quality, low-cosl producls)
typologies, o rgan izations should only consider those that (Milosevic, 2003). As o pposed to the traditio nal stereotype,
aligo with their project management practice and their busi- the recent literature recognizes project management as a key
ness strategy, e.g., Miles a nd Snow's typology ( 1978), business process (Jamieson & Morris, 2004 ) . This view
Po rter's gcneric strategies ( 1980), Treacy and Wiersema's defines an o rganizatio n as lhe process rather than the tradi-
typology ( 1995) . In this paper, we present o nly o ne, Po n er's tio nal functio nal or matrix form and describes pro ject man-
generic slrategies, using it as 1he fo undation fo r a ligning agement as o ne of the key business processes that e nable
projecl managemenl and b usiness strategy (see the Research companies to im plement value d elivery systems. Therefore,
Design sectio n for informalio n abo ut our reasoning). when o rganizalions link their p ro jects to thei r b usiness
Poner ( 1980) claimed that lo achieve a sustainable slrategy, they are better able lo accomplish their o rganiza-
competitive advantage, an organizatio n musl reinfo rce ils tio nal goals. Shenhar's strategic project leadership (SPL)
chosen strategies. Depending on 1he scope, there are three framework ( 1999 ) identifies t he p ro ject managemenl ele-
generic stralegies thal can result: cost leadership, differentia- ments thal organizatio ns sho uld align with business slrate-
tio n, and focus. Accord ing to Po ner, generic strategíes- gy, elernents such as project strategy, o rga nizatio n, process,
when an o rganizalio n chooses o nly o ne-p rovides the tools, metrics, and culture. (Fo r lhis paper, we have ad apled
o rganization with the abili ty lo achieve competitíve advan- the SPL fra mework, add ing metrics and changing project spir-
tages and outperform their competilo rs. llowever, if an it 10 project culrure.)
organizatio n pu rsues more than o ne generic slrategy, it will
pe rfo rm below its capabilily. Po ner referred 10 lhe latter type Aligmnent Lirerature
of o rganization as stuck-irHIIe-m iddle. Despile this, the pro- Research in the li1era1ure has exami ned the idea of align-
liferation of global competitio n is compelling more o rgani- menl in vario us management areas. Fo r example, nu merous
zations to focus o n a single combination of generic sludies have d iscussed the alignment be1ween tasks, po li-
strategies ( 1-larrison & St. lohn, 1998). Many researchers and cíes, and practices (e.g., Boyer & McDermott, 1999; Kathuria
practiüo ners ( e.g., Hill. 1988; Miller & Friesen, 1986; & Davis, 2001 ); o thers have e mphasized the relatio nship
Phillips, Chang, & Buzzell, 1983; While, 1986) refer lo 1his between alignment and perfo rmance in regards 10 o rganiza-
combination as the best-cost slrategy. In this paper, we used tio nal hierarchy: corporate, business, and fun ctio n (e.g.,
tluee o f the previously mentio ned busi ness slrategies for our Papke-Shields & Malhotra, 200l ; Youndt, Snell, Dean, &
analysis, each of whid1 we d efine as fo llows: Lepak, 1996 ). The li teralure frequently mentio ns research
• Cost /eadership: Organizations pursuing a cost leader- and development (R&D), p rod uction, human resources,
ship s1ra1egy seek 10 gain com petilive ad van tage a nd and informal io n techno logy- amo ng others-as fu nctio nal
increase markel share by being the lowest cosl pro- stralegies and uses these as 1he variables to exa mine align-
d ucers in the industry (Porter, 1980). menl in relatio n to the b usiness strategy. Because projecl

AliG\IST l OOÓ I PR l1)ECT M M,:AUEM ~NT j l1L RNA L


199
management is sim ilar to these fu nctionaJ strategies, it too order to obta in information from different perspectives
sho uld be a ligned with the business strategy ( llarrison, (Boynto n & Zmud, 1984). In addi tion to the interviews, we
1992 ). However, the trad itional literatu re o n aligning pro j- reviewed related documents-meeting minutes, pro ject
ect management with the business strategy is vague: Most descriptions, risk logs-to triangulate and valida te our fi ndings.
studies link the business strategy with pro ject management In this study, we d etenn ined a case stud y to be a study
through pro ject seleclion, viewing itas part of the alignment nf a pro ject in a distinguishable business unit, where a proj-
p rocess (e.g., Baker, 1974; Bard, Balachandra & Kaufmann, ect is bei ng executed. To select th e reviewed cases (com pa-
1988; Cooper, Edgett & Kleinschmidt, 1998a; Englund & nies, projects, a nd participants). we defined multiple criteria
C rah am, 1999; Hartman, 2000). Added Lo th is is p roject and identified the cases rnost relevant to such criteria as the-
portfo lio management (PPM and also called pipeline man- orelical sampling and pro ject fra rne of reference (pro jects
agement). another concept suggested in the literature to completed in al least six mo nth o r u nder) as well as the pro j-
ensure the strategic alignment of project management and ect management exp erience o f the participants ( at least
business strategy (Turner & Simister, 2000). Cooper, Edgeu, three years ).
and Kleinschm idt ( 1998b) defined PPM as a dynamic deci- We then classified these pro jects into d ifferent types,
sion-rnaking process through wh ich a n o rganization ca n including strategic projects (creating strategic positions in
update and revise its list of active projects. The organiza- markets and b usinesses), extensio n pro jects (improving o r
tion's cho ice of business strategy is what drives their PP1\II u pgrading an existing p roduct), utility projects (acquiring
process, the majar purposes o f w hich are to select and pri- and installing new equipment or software, implementing
o ritize pro jects (Cooper et al., 1998b ), ba lance projects new methods o r new processes, reorganizatio n, reengineer-
(Archer & C hasemzadeh, 1999; Cooper et al., 1998b ), align ing), and R&D projects (exploring future id eas, no specific
pro jects wi th the b usi ness strategy (Cooper et al.. 1998b ), product in mind). Th ese pro jects were also categorized in
rnan age rough -cut resource Glpacity ( llarris & McKay, 1996; regards to externa! cu stomers (externa! comract o r con -
Wheelwright & Clark, 1992). and articulate em powerment sumers), interna! customers (i nterna! users o r another
bo undaries for pro ject and fun ctio nal man agement (l larris department), or b oth. We also evaluated each project in re la-
& McKay, 1996). tion to such success dimensions as pro ject efficiency, irnpact
O nly recently h ave researchers started to explore the o n the customer, direct o rganizational success, and tearn
alignrnent of project management mo re tho roughly (e.g., leader and team spirit.
Artto & Dietrich, 2004; Jamieson & Mo rris, 2004; Papke- After each interview (phase 2: d ata an alysis), we tran-
Sh ields & Malho tra, 2001; Srivannaboon & Milosevic, scribed the conversatio n and coded it. We then wrote case
2004 ). For example, Jamieson and Mo rris (2004) suggested studies- 25-30 pages per case-about o ur interviews and
that most o f the components comprising the strategic p lan- study of the related documents. We sent these cases to the
ning process- internal analysis, o rganizational structures, com panies to verify t.he accuracy of our transcri ptio ns so as
control systems- have stro ng links to project management to enhance the validity of the research. We then performed
p rocesses and activities. As a result, these stro ngly influence within-case, cross-case, a nd content analyses. Al together, we
an o rganization's intended business strategies. Simi larly, studied eight cases (Cases A to H) in seven o rganizations, a
Artto and Dietrich (2004) suggested that an impo n ant man- stud y that invo lved nine projects o f differing size, type, and
agerial ch allenge involved in align ing project manilgement complexity (42 interviews). During phase 3, we engaged a
and business strategy is encouraging individuals to panici- panel of five expens- from academia ( tluec pro fessors) and
pate in using emerging strategies to create new ideas a nd industry ( two practitio ners )- to valida te the essential find -
renew existing strategies. These stud ies suggest a need for ings. These ex:pens generally agreed o n the findings; they
more research in this area; none, however, explicitly talks also contri buted views, which we integrated into our find -
abo ut the process used to align p roject management an d ings to sharpen our theoretical frarnework.
business strategy cohesively and comprehensively. For each case study, we employed a self-typi ng method
(Conant, Mokwa, & Varadarajan, 1990) to classify the busi-
Research Design ness strategy, one based o n Porter's generic strategies
To complete this study, we integrated two overlapping ( 1980). w hich we used to illustrate the irnpact of the busi-
research phases: data gathering and data analysis. During ness strategy types o n the compositio n of project manage-
d ata gatheri ng ( ph ase l ). we conducted a 1iterature review men t elements. We chose Porter's generic strategies to
so asto understand the general research on aligning project classify business strategies types because o f thc fo llowi ng:
management and b usi ness strategy. 1n paraJlel with o ur lit- • Po rter's gen eric strategies are well accepted and o per-
erature review, we researched case-studies over a 10 -month ationalized in the literature (e.g., Harrison & St. Jo hn,
period, studying the nature of alignment in market-leading 1998; Kim & Lim, 1988; Miller & Dess, 1993;
o rganizations through sem i-structured interviews ( ra nging Reitsperger, 1993; Veliyath, 2000).
from 60 to l 20 minutes per interview) with individuals • Poner's generic strategies focus on the strategic posi-
holding key o rganizational positions, individuals such as tioning di mension of the business strategy (Kald,
senio r managers, pro ject managers, assistant project man- Nilsson, & Rapp, 2000), the underlying way in which an
agers, and tea m mem bers-as well as a few cu stomers- in organizatio n relates to its product. where differentiatio n

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:

102 A u¡;u~T >ooli I I'ROJECT M ANAt<F.M~>~T ) nU RNA I.


(1} Differentiation Strategy
(Examples: Time-to-market or quality differentiation)
Emphasis is placed on:
• (Strategy) Schedule or quality project success
measure
• (Organization) A flexible structure to facilitate
project speed or product quality
• (Process) A flexible process to speed up projects or
maximiza product quality
• (Tools and Metrics) Schedule- or quality-oriented
tools and metrics
• (Culture) Rewarding time-to-market speed or quality

(2) Cost leadership Strategy (3) Best-Cost Strategy


(Example: Process improvement) (Example: Ouality/cost)
Emphasis is placed on: Emphasis is placed on:
• (Strategy) Cost-efficiency project success measures • (Strategy) Quality and cost project success
• (Organization) A flexible structure to adapt to measures
changes in process improvement • (Organization) A flexible structure to ensure the best
• (Process) A highly standardized and built-on product quality at the mínimum cost
template process • (Process) A standardized but flexible process
• (Tools and Metrics) Cost- and schedule-driven tools • (Tools and Metrics) Quality/cost-oriented tools and
and metrics metrics
• (Culture) Cost-conscious culture • (Culture) Rewarding quality/cost culture

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-

t\ L L>U~T >Oo6 j i'Rlli~LT M AS~lol M I \J T } <'11 1\NAI 103


ating conditions of reviewed projects, which are revealed at process, tools, metrics, and culture) is to accomplish the time-
stage gate reviev.-s. Results o f stage gate reviews may impact the to-market compelilive attribute. 'lñis study defi nes this focus
business's strategies and its competitive attributcs because o f as schedule-driven (see Figure 2). The content o r configuration
environmental changes (also known as the emergent of project management elements (strategy, o rganizatio n,
approach IMintzberg, 1994 1}. process, tools, metrics, and culture) is also tailored to support
Proposition 7: Project management e lements rnay this schedule-driven focus. For example, in case study A. the
irnpact business strategy. as based o n the o perating cond i- configuratio n of the project strategy (Pl) was tailo red to sup-
tions of reviewed projects. port its schedu le focus; the time-to-market competitive attrib-
ute adopts a strategic focus thal allows project managers 10
A Tl!eoretical Frameworlt: Nature of tl1e Project. Marwgement- igno re cost and product fealures in maki ng trade-o ff decisio ns
BtlSÍtleSS Strategy Aligmnetll in arder 10 attain time-to -market goals. The project process
To construct a theoretical fra rnework for the configuratio n of (P3) is similarly tailo red to deliver a time-lo-market competi-
project management elements. one influenced by business tive advantage by overlapping o r combining process phases,
strategy, we used the seven proposilions previously o utlined to milestones, and activities. At the same time, operating condi-
connect business strategy and each project management ele- tio ns detected fro m stage gates (P7) help to redirect projects, if
rnent {PI to P6) and vice versa (P7). The nature o f the project there is any change that might threaten the success of the proj-
management/ business strategy alignment is depicted in the ects. There are infinite combinations of competirive attributes
theoretical framework in Figure 2 as the impacting nature. as that companies can use as sources o f advantage 10 compete
that which addresses the relatio nship between the competilive with their rivals. lñere are also unlimited alternatives for tai-
attributes of business strategy and the focus and content o f loring project rnanagement elements to suppon these compet-
project management elements. itive attributes. Propositions 1 lo 6 demonstrate how the
A company (business unit) makes its strategic choice by competitive attributes of business stralegy configure the indi-
seJecting competitive attributes that are advantageous (e.g., vidual project management elements. This should lead lo one
time-to-markel, quality, cost. and features). ·n,esc attribules single and generic proposition that describes the interactio n of
are used to drive the d ifferent ways that projects are managed the business strategy and pro jecl management elements:
in terms o f 1heir foci and contents. For example. if the com- Generic Proposition: The competitive attributes of the
petitive attribute of lime-to-market is d1osen, the focus or pri- business slrategy drive the fo cus and content of pro ject man-
ority of project management elements (stralegy, organization, agemenl ele ments.

Business Project Management


Strategy lmpacting Nature Elements

Competitiva PM Elements PM Elements


Attributes Focus Contents
Strategy

Org.
The
Competitiva Process
A!tributes of
Business
Strategy
Tools

Metrics

Culture

• • •
• • •
• • •
·Proposilions
L---------------------------------------------------~ P7*
!__________ _ __________ __ _____ __ ____________ __ _______________________ _

Figure 2: A theoretical framework for the nature of the alignment

A llU I H lOOt\ 1 P ROJ H"T M A N AUf. MEN 1 j OU RNA L


Tite Process Used for rhe Project MtmagememfBusiness Leve! 2-Mediating Process al tl1e Project Level
Strategy Aligmnent O nce o rganizations select projects into their ponfol io, they
In this subsectio n, we analyze the patterns of the processes further plan the d etails and executc thesc throughout thc proj-
used by lhe companies we surveyed 10 aligo pro ject man- ect life-cycle p hases. We refer to these mechanisms so as to
agemen t and business strategy. In do ing so, we discuss the ensure the proper alignrnent d uring the project life cycle as
simil arities and the dissimilarities across all cases in order to the mediating processes at the project level. which can be clas-
generale a theoretical fra mework o f the processes that sified into the p lanning process and lhe monitori ng process.
o rganizations use lo ensure proper a lignmenl. We per- In the plann ing process. we found that the companies
form ed a conlent analysis to compare these cases and iden- used varying mechanisms to ensure proper alignment. The
tify lhe pallerns o fthe alignmenl proresses used acro ss these most explicit p lanning mechanism used was in Case C: 1nis
cases. The pattem we found revealed tha1 organizations company requ ired that project managers identify the align-
could divide the mechanisms used 10 aligo projects with ment lin k of their project p lans and the goals in their strategic
busin ess strategies into three levels: the strategic, the tactical, plan. 'Jhis was accomplished through product definition and
and the correclive emergent strategic feedback. Each levels project definition, by lin king these with the business goals oul-
contained distinct mechanisms to achieve alignment. Table 1 lined in the strategic plan. ln the o ther cases, this was implicit-
surnmarizes the alignmen l procc.o;s o f d ifferent cases and ly accompl ished through the development of the project plan,
patterns upon these levels. as based upon the objectives o f the projects and the reason
why these exjsted, such as ad1ieving business goals.
Leuel 1- Mediat ing Process at rlre Srrategic Level We found that as projects progress, mosl companies use
The general sleps ofthe alignment process begin at the strate- common mechanisms 10 ensure these are properly aligned
gic level, where the long-term b usiness goals are d efined and during execution, using mechanisms such as project metrics,
business d irections are determined through a stralegic plan, interna( coordination mechanisms (i.e., project manage-
through what Mintzberg ( 1994) called an in tended strategy. ment office involvemen t and interna( sign -off), custo mer
We found that every sample company h ad a strategic plan; invo lvemen l (sign-off), and stage gates. This last ítem, stage
sorne used a formal plan, some used an informal one. In all ga1es, is so imponant that we h ave separated it from this sec-
bul two cases, these plans were develo ped lo reOect a three- tio n to explain it separately as the mediating process at the
year p lan ning ho rizon. One exception was Case B, which at emergent slrategic feed back levcl.
the time o f our interview was a sho rt-term plan (one-year
ho rizon) that the company was active! y expanding 10 a three- Leve/ 3-Mediating Process al rhe Emergenl Strategic
year range. The other exception was Case G, which used an Feedbac/1 t evel
informal plan due to the na1ure of its business (construc- Stage gales are points in the project life cyde where pro jects
tion). In some cases, roadmaps were induded in th e strategic transition from stage to stage. The gates represen! filters for
p lan as the guidan ce for the company's (or department's) project status and provide pro ject teams with the opportu-
future interests, such as a product roadmap (Cases A and B) niry to realign the project 10 the requirements set by the
and an information technology roadmap (Case 0). pro ject owner. In the sample companies. we observed such
We also observed that the sample companies used a slage gates as mileslone reviews for evaluating the project
projcct portfolio process- aga in, some used a form al status (time, cost. performance). An exceptio n 10 this obser-
process. o thers used an informal one- as a mechanism for vation is Case A. This company covered staffi ng level and
selecting the most vaJuable projects that would contribute to market shift considerations as additional concerns. When a
the organization's goals. To select such projects, and make project fails to meet a stage gate's requirements (i.e., when
them pan of the portfolio, many companies used ma1ched the project is misaligned), 1he project team must adjust the
their swuegic goals with the project's contribution. with its project (if the owner has not killed the p roject), in accor-
strategic fit. In severa! cases, the term project portfolio was dance with the o perating conditions of the project.
not recognizcd, but its project selection and prioritization In cenain instances where the operating co nditions of
fun ctions were employed (Cases B. E, F. G, and H). In addi- the project reveals significan! changes resu lting from inter-
tion, 1wo cases recognized the term project portfolio, but it was na! or externa! factors, revealing factors that may affect the
still an informal process (Cases C and 0). O nly Case A had overa ll success of the project if the project manager fails 10
a fo rmal projecl portfolio management process and semi- manage the changes, the operating conditions will impact
ann ual portfo lio reviews, one that included such functio ns as the deployment of the business strate{,'Y by changing the pri-
project selection and prioritizalion, risk balance, strategic orities under which the pro ject is managed. For example, we
alignment, and capacity management. Tab le 2 summarizes fo und lhat one of the examined projects in Case A was con-
these project ponfolio processes and fun ctions used by the sidered an unsuccessful project by its project team and the
sample companies. company's upper management, even tho ugh the was in itial-
In general, the mechanisms to ensu re the alignmenl ly well aligned with the company's busin ess strategy. Pan of
process at this level are what we refer to as "the mediating the reason for this perceived fa ilure was that the project was
processes at the strategic level. " wh ich i ndude a strategic plan committed 10 the wrong se1 of customers, which led to a
and pro ject portfolio management. poo r product d efinition of the overall market. By the time
Case Strategic Level of the Tactical Level of the Corrective Emergent Strategic
Alignment Alignment Feedback Level of the Alignment
1 1 1

Case A • Three-year strategic plan (e.g. , • Dashboard • Semi-yearly project portfolio


product map, technology • Flexibility matrix reviews
roadmap, business model) • Gate reviews of individual
• Bounding box
• Project portfolio projects (market shift, staffing
- Strategic table • Project life-cycle phases
level, project status)

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

Case H • Three-year strategic plan • Project list • Semi-yearly dashboard reviews


• Dashboard • 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.

Table 1: The alignment process and patterns across all cases

to6 A u<~ ll sT • oot\ 1 PRnJECT M ~~M~n1 ENT Jou RNA L


Case Formahty Used Project Portfoho Proccss Functions
1 1

Case A Formal and recognized Project selection and prioritization, risk balance, strategic alignment, and
capacity management

Case B Informal and not recognized (the Project selection


term is not used)

Gasee Informal but recognized Project selection

Case D Informal but recognized Project selection and prioritization

Gases E& F Informal and not recognized (the Project selection


term is not used)

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)

Table 2: Project portfolio process

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
~------------------------------------------------~

*Propositions Represents Stage Gales


-- -- - -- -- - --- Represents a Feedback Loop
(emergent approach) when the project is required
to change or is reje<:ted at the stage gates

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
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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.

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