Strategy is an essential part of any organization. Its types can be differentiated on the basis of their deliberate and emergent methods of implementation (Mintzberg & Waters, 1985, p. 257). Project management may be argued to be inherently included in the strategy development, because strategy includes directing an organization and responding to challenges on the way to strategy implementation (Mintzberg & Waters, 1985, p. 271). Relative emphasis of the strategy is flexible, but these two features are a requirement of sound strategy development (Mintzberg & Waters, 1985, p. 257). The way managers track strategies is significant for ‘strategic control’, which is an elusive concept (Mintzberg & Waters, 1985, p. 258). Every manager is in essence a project manager in the process of strategy implementation, because he/she is responsible for finding patterns in organizational activities (Mintzberg & Waters, 1985, p. 257). This knowledge of organizational behavior allows managers to improve the efficiency of their respective companies. Effective managers are self-aware as well as aware of the patterns among their teams and organizations (Mintzberg & Waters, 1985, p. 257). Empirically, it has been proven that in developed states the effectiveness of project management for strategy implementation is questionable (Mir & Pinnington, 2013). Therefore, the aim of this work is to analyze the role of project management in strategic choices and its risks within this area.
According to the literature, strategic management is important for the whole organization and its objectives, but it is especially important on the level of the management of individual projects (Shenhar et al., 2005). Operations management focuses on a specific task, while strategic project management covers wider business outcomes (Shenhar et al., 2005). Therefore, strategy implementation and project management are inseparable. Without a sound business strategy, project management would be just the accomplishment of tasks. Without project management, the strategy would be unattainable. Therefore, business strategy is a headline for individual strategic projects (Turner, 1999). Projects, therefore, are controlled by the parent organization (Milosevic & Srivannaboon, 2006). Thus, the project strategy is fed by the organizational objectives (Anderson & Merna, 2003).
According to the above assumptions, strategy is the front end part of each individual project, and thus separate projects need to be guided by the general strategy of the company (Artto, Kujala, Dietrich, & Martinsuo, 2008, p. 6). Therefore, all projects of the company are under the umbrella of general business outlook, rather than separate goals (Artto et al., 2008, p. 6). As a result, the projects are guided by one stakeholder, who guarantees their efficiency for the whole organization’s success. However, realizing that project management is limited by the operational techniques and goals of the parent firm, it may be argued that project management concerns tactical, rather than strategic, decisions (Artto et al., 2008, p. 6). In this respect, project management is limited by certain practices and norms, and therefore its role for the overall strategy is undermined and limited.
On the other hand, Artto et al. (2008) introduce the concept of project strategy, within the scope of which project management is a dynamic form that is independent from the overall business strategy of the organization to which it belongs. Independent project management teams can carry out end-to-end activities related to the new offering of a business (McGrath, 1996). However, the success of this process lies in a model that is implemented based on the individual project structure. Unfortunately, it is highly questionable whether the majority of organizations possess the skills and experience needed to implement this elaborate approach to project management.
Some literature acknowledges that project management should include strategic decisions at the level of specific project, but still be guided by the overall business objective. For instance, Arnaboldi, Azzone, & Savoldelli (2004) conjecture that the ‘project management strategy’ encompasses wider organizational challenges and methods of strategic management of the firm-level change project. Other researchers consider that project strategies should include internal choices of approach, management, product scope and concept among alternative options (Artto et al., 2008, p. 7).
While each of these approaches assumes that project management strategy is restricted by organizational strategy, there is substantial literature that takes an opposite stance. In particular, some researches approach project management as an autonomous and isolated concept (Artto et al., 2008, p. 7). Uncertainty and turbulence are important obstacles for organizations that adopt such approach, but they are manageable with the help of specific frameworks (Miller & Lessard, 2001). Managerial behavior, vague roles, unclear objectives and too narrow focus may also challenge the performance of the specific project on a wider organizational scale (Morris, 1982). Lampel (2001) views project management as a ‘life-organism’ that carries out various tasks depending on the environmental and situational factors.
Like organizations, projects exist in dynamic environments. Independently, projects should be viewed as open systems (Lundin, 1995) that are interacting with their environments (Engwall, 2003). However, the independent view of project management should not be misguided. The dynamism of project management requires both tactical and strategic choices, but at no point should it deviate from the wider strategy of the firm (Slevin & Pinto, 1987). In fact, the strategic focus should be constantly reevaluated taking into account changes in environment and new project developments (Slevin & Pinto, 1987).
What concerns challenges related to the project management’s success for strategic implementation, literature adopts varying techniques to the analysis of this issue. For instance, Anderson & Merna (2003) propose that the failure of project management is often caused by poor strategy formulation, rather than downstream implementation. Therefore, authors argue that strategy should be carefully developed and deployed for the project management processes, because the success of its activities will rely on it (Anderson & Merna, 2003). Longman & Mullins (2004) support the view that strategy does not usually get efficaciously translated into the language of project management. They conclude that effective project management execution encompasses careful “structure, leadership, goals, processes, skills, system, issue resolution and structure”, which should guide the activities of dynamic project work (Longman & Mullins, 2004, p. 60).
More specifically, the risks inherent to project-based work have been empirically discussed by Hobday (2000). In particular, the researcher studies the effectiveness of project-based form of organization as compared to a regular matrix structure within the scope of complex production systems, networks and goods (Hobday, 2000). Whereas project-based approach to business activities is flexible with regard to emerging production properties project risks and changing client needs (Hobday, 2000), it still has specific challenges. For instance, routine task performance, attaining economies of scale, cross-project resources management, technical provision and learning promotion within the organization are weak in project-based entities (Hobday, 2000). Hobday (2000) also notes the challenges of business coordination and corporate strategy. More specifically, senior managers have trouble tracking, controlling and responding to the activities of project teams (Hobday, 2000, p. 892). In order to solve this issue, project teams need to work in unison with technologic and market targets of the whole organization (Hobday, 2000, p. 892).
Striving to cope with the existing challenges between project management and strategy formulation, it is necessary to understand these two concepts better. Munns & Bjeirmi (1996) note that project management is an elaborate process that requires specific resources and capital, and it is not to be confused with just a working process. Formulation and implementation of strategies requires the project to be positioned as one type of project strategy approaches: planned, entrepreneurial, ideological, umbrella, or process (Mintzberg & Waters, 1985). Then specific adjustment can be made to the strategy at the project management level. Secondly, it is important to recognize continuous change in organizations and projects (Brown & Eisenhardt, 1997) and establish strategies for autonomous projects that would be considerate of environment but not restricted by their isolation from parent companies (Artto et al., 2008, p. 7). Additionally, determining the level of project’s autonomy and the complexity of the environment where the project operates may help the firm establish a more precise and productive strategy (Artto et al., 2008). Griffin & Page (1996) argue that business strategy should be the guiding force of project management. For instance, innovators need to asses the value that the new technology brings, and those firms that do not innovate must evaluate the efficiency of their system of product development (Griffin & Page, 1996).
All things considered, efficient strategy ensures that a company follows its vision and performs well. However, the role of project management should not be underestimated in the process of vision attainment. Modern project management is a complex system of activities and relationships that require strategic and tactical plans. Project management can only be successful if all managers (both senior and grassroots) understand the wide mission of the company as well as the individual plans of project management teams. Literature recommends managers to allow project teams to enjoy much freedom, but simultaneously align their activities with the values and strategy of the company.
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