Day1_12.30-14.

00_doc2_Prereading_Project_Strategy
This document includes one part of prereading material for:
• Global Projects, Business Networks, and Project Business Workshop, Stanford 24-25th
April 2007
• Day 1, 12:30-14:00: “Group work: Project strategy and management of actor networks in
projects – case Botnia”

What is Project Strategy?

This prereading material consists of excerpts from the following paper:

“Artto K., Kujala J., Dietrich P., Martinsuo M. (2007). What is project strategy?, European
Academy of Management (EURAM) 2007, 7th Annual Conference, May 16-19, Paris, France”

Artto, Karlos, Prof. (corresponding author)

Helsinki University of Technology
Industrial Management
P.O. BOX 5500, FI-02015 HUT, Finland
Tel: + 358 9 451 4751
Email: karlos.artto@hut.fi

WHAT IS PROJECT STRATEGY?

ABSTRACT

The concept of project strategy has remained ambiguous across different studies. In this research
we review literature on project strategies from multiple viewpoints and develop a definition for
project strategy, which allows a more open interpretation about the content of the strategy of an
individual project. Our definition is used to expand understanding of different alternative project
strategies that are related to two important dimensions in a project’s environment: project
autonomy and number of strong project stakeholders. We introduce four different types of
strategies along these two dimensions: obedient servant, independent innovator, flexible
mediator, and strong leader. When compared to existing literature, both the definition and the
four project strategy types introduced in this paper allow a more open interpretation about the
content of the strategy as well as the processes of strategy formulation and implementation. The
paper suggests empirical research on detailed contents of different project strategies.

Keywords: project strategy, project business, project management

INTRODUCTION

The project management literature on project strategy provides a rather narrow definition of the
concept of project strategy. In existing project strategy studies projects are assumed to take a
fairly tactical role as non-strategic and non-self-directed vehicles in one parent firm’s context.

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The majority of project management literature on project strategy has adopted a point of
departure where the project depends on and operates under the control of one strong parent
organization. With such assumption, the mere strategy a single project remains to conform to the
parent organization’s ways of operating. According to existing project strategy literature, the
strategy of a single project serves the goals of the surrounding parent organization, and the
project strategy is created in the early phases of the project and remains stable after that (Cleland
1990, 2004, Wheelwright & Clark 1992, Turner 1999, Anderson & Merna 2003, 2005, Morris &
Jamieson 2004, Jamieson & Morris 2004, Shenhar et al. 2005, Patanakul et al. 2006, Milosevic &
Srivannaboon 2006). Here, project strategy is subordinate to a broader and more significant
business or corporate strategy and it is generated by feeding it directly from the parent
organization (Anderson & Merna 2003, 2005, Morris & Jamieson 2004, Jamieson & Morris
2004).

Our paper redefines the project strategy concept to include also other types of strategies of a
single project than the tactical role of an obedient servant of one parent organization. The
justification for a wider definition can be found from studies that do not refer to project strategy
as a concept but still include contentual discussion on project strategies of individual projects
without apparent presumptions on whether the project would be strongly controlled by one strong
parent organization or not. We suggest that there are two important variables related to a single
project that have an impact on the type of strategy that the project would adopt. The two variable
are 1) project autonomy, and 2) number of strong stakeholders. Studies suggest that projects can
be autonomous organizations and they can have strategies of their own (Slevin & Pinto 1987,
Samset 2003, Arnaboldi et al. 2004, Lam et al. 2004). With autonomy in goals and plans,
projects also tend to use their own methods and systems rather than those of a parent
organization. Autonomy of a project in terms of its method of execution can be contained in a
concept of project execution strategy.

The case of several strong stakeholders for a single project would change radically the
assumptions in existing studies about the case of one parent organization being the undisputable
single stakeholder and ultimate master for the project that serves as a servant to this master. The
management in the surrounding parent and stakeholder organizations introduces dynamics and
increased complexity to a project’s external environment, which often may set a requirement for
a specific strategy of a project. Some studies have recognized the existence of an own business-
contained or self-established project strategy directly in connection with the project’s dynamic
environment, which is different from the dynamic environment of a project’s parent organization
(e.g. Loch 2000, McGrath 1996, McGrath and MacMillan 2000, Pitsis et al. 2003). Turbulence in
the project’s environment, uncertainty and complexity tend to be important issues that affect the
project and its strategy. A large number of strong stakeholders is one factor that may increase
such turbulence, uncertainty and complexity. Empirical and empirically based conceptual studies
on large projects acknowledge this kind of a dynamic character (Kharbanda and Stallworthy
1983, Morris and Hough 1987, Kharbanda and Pinto 1996, Miller and Lessard 2001a, 2001b,
Williams 2002, Flyvbjerg et al. 2003, Grün 2004). According to these studies, a project is no
longer subordinate to a single parent organization, but it is a significant node and player and
thereby constitutes a shared organizational frame for multiple stakeholders. Project strategy,
then, represents a success recipe for a project with high level of autonomy, or for a project
embedded in its complex context with several strong stakeholder organizations.

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OBJECTIVE AND RESEARCH QUESTION

The objective of our paper is to define the concept of project strategy and characterize different
project strategy types based on analytical reasoning and synthesis from existing literature. Thus,
this perspective allows us to apply generic concepts and research on strategy to answer the
research questions: “What is project strategy?”

EARLIER LITERATURE ON PROJECT STRATEGY

Project strategy has received much attention in the recent project management literature. Several
authors have made an attempt to explicitly define elements of project strategy (Turner, 1999;
Wheelwright & Clark 1992; Morris & Jamieson, 2004, Pulkkinen, 2005; Shenhar et al., 2005, &
Patanakul et al., 2006), but the concept itself has remained rather ambiguous across different
studies.

We identified three dominant tracks of project literature, referring explicitly or implicitly to the
concept of project strategy:
1. Project as subordinate to a parent organization:
Cleland 1990, 2004, Wheelwright & Clark 1992, Griffin & Page 1996, Turner 1999,
Anderson & Merna 2003, 2005, Morris & Jamieson 2004, Jamieson & Morris 2004,
Shenhar et al. 2005, Patanakul, Shenhar & Milosevic 2006, Milosevic &
Srivannaboon 2006.
2. Project as an autonomous organization but connected to a parent organization:
Bryson & Delbecq 1979, McGrath 1996, Loch 2000, McGrath & MacMillan 2000,
Milosevic 2002, Arnaboldi, Azzone & Savoldelli 2004, Pulkkinen 2005, Lam, Chan
& Chan 2004.
3. Project in a complex environment with unclear overall governance scheme:
Morris 1982, Kharbanda and Stallworthy 1983, Slevin & Pinto 1987, Morris and
Hough 1987, Milosevic 1989, Kharbanda & Pinto 1996, Miller & Lessard 2001a,
2001b, Williams 2002, Flyvbjerg et al. 2003, Samset 2003, Pitsis, Clegg, Marosszeky
& Rura-Pouey 2003, Kolltveit, Karlsen & Gronhaug 2004, Grün 2004.

DEFINITION OF PROJECT STRATEGY

Based on our analysis, we conclude that the concept of project strategy should not be limited to
serving a single parent organization only as the literature that uses the explicit project strategy
term tends to suggest. Such a view would force projects to become tactical, unauthorized
vehicles for implementing business strategies beyond their own control. Instead, the concept of
project strategy should acknowledge a project’s autonomy as well as its unique position as part of
its context. Concerning the levels of project management (Morris 1982, referring to Parson
1960), a project strategy should concern not only operative and tactical levels, but also the
institutional level, and thereby enable a project’s significant interaction with its context. This
broader viewpoint would allow the project to define and implement a strategy of its own in
alignment with the project’s unique environment.

Therefore, a more holistic project strategy concept should be developed, to take into account a
project’s possibility to operate as an autonomous organization, to seek survival and success in an
uncertain and complex environment, and to consider strategic options possibly with multiple

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strong stakeholders. We have constructed a generic definition for project strategy as a result of
the conceptual analysis from existing literature above. Our project strategy definition is:

“Project strategy is a direction in a project that contributes to success and survival of the
project in its environment.”

Our project strategy definition above a generic definition that is designed to allow for different
kinds of project strategies that individual projects may have. In order to clarify this, we address
the meaning of the words direction, contribute, success, survival, and environment in our
definition above:
• We selected word direction to describe explicit elements of the project strategy. It can be
interpreted as either one or several of the following: goals, plans, guidelines, means,
methods, tools, or governance systems and mechanisms including reward or penalty
schemes, measurement, and other controlling devices. We assume that all these elements
include a capability to directly or indirectly affect the project’s course. Project’s
“direction” and its elements may change even on a continuous basis in a project, which
suggests that project and its strategy is dynamic.
• Contribute refers to the assumption that the “direction” has an effect i.e., it matters and
makes a difference.
• Success refers to how well the project is able to accomplish its goals. Project success can
be evaluated by project stakeholder, which may have different and conflicting criteria
project’s degree of success. However, our definition allows an interpretation that project
can be successful by meeting its self-established goals that may be against the interest of
most or even all major stakeholders.
• Project as a temporary organization is created to fulfill a its goals and after that it ceases
to exist. Thus survival refers to whether project is able to compete against other projects,
obtain access to necessary resources and continue to exist in order to become successful.
• Environment refers to the world outside project’s boundaries with which project as an
open system must continuously interact. Thus, also the project’s parent organization and
other stakeholders belong to project’s environment. The boundary between project and its
environment is dynamic and in constant change as project organization integrates external
resources into its organization.

TYPES OF PROJECT STRATEGY

Based on the analysis of existing literature we conclude that project strategy is influenced by two
distinct factors: how autonomous a position the project possesses in relation to its parent
organization(s), and the complexity in the project’s operating environment created by the number
of strong stakeholders. Based on the two characteristics identified above, project autonomy and
type of stakeholder environment, we suggest that there are four distinct types of project
strategies: obedient servant, independent innovator, flexible mediator, and strong leader. These
project strategy types are illustrated in Figure 1. When there is only one strong stakeholder
organization for the project, this one organization is typically the project’s parent organization.
The existing recent project strategy discussion assumes that there is one strong parent, and
accordingly, the ‘project’s alignment with strategy’ often means that the project is aligned to the
strategy of the parent organization. Furthermore, this often means that the only remaining
strategy for the project is to obey its parent, and what the existing literature refers to as ‘project
strategy’ is represented plan-like and static interpretations of project’s purpose and approach that
is approved by the parent organization. When there are several strong stakeholder organizations

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instead of just one parent, the project must adopt different kinds of strategies. In both cases – one
or several stakeholders – the project’s strategy type selection is affected by the level of autonomy
that either is granted to the project or taken by the project independently.

Number of strong stakeholder organizations

one several
high
Level of project autonomy

Independent innovator Strong leader

Obedient servant Flexible mediator

low

Figure 1. Four types of project strategy depending on project autonomy and number of
stakeholders

The four project strategy types in Figure 1 are explained in the following, by discussing each
type in terms of the direction and success issues of our project strategy definition above.

Obedient servant project considers its parent organization as the most important stakeholder in its
environment: obedient servant project exists for its parent, and obedient servant’s approach is to
fulfil its parent’s will. This setting provides a specific direction to a obedient servant project. The
obedient servant strategy may result to project’s success due to appreciation of the parent
organization, measured by how well the project implements and supports parent’s business
strategy.

Independent innovator project establishes its direction by encouraging innovative and

independent behavior for finding or maintaining the project’s own business content and purpose.
An independent innovator joins with such parts of the parent organization (e.g. sponsors) or other
stakeholders that help to advance the project’s purposes, but competes, fights or hedges against
such parts of the parent or other stakeholders that pose a threat to the projects purpose. The
success of an independent innovator may be measured through newness or degree of change or
impact related to the project outcome, or even through the project’s capability to renew or change
its parent’s business strategy.

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Flexible mediator project finds its direction by adopting a view to perceive the world prevailing
among the group of several strong stakeholders. This means the project’s adaptation to its
stakeholders goals and objectives set for the project, and to stakeholders’ stardards of practice
and potentially to the industry practice that the stakeholders represent. The success of a flexible
mediator may be measured by the synergy that the project could create among stakeholders’
participation, level or number of feasible compromises among the stakeholders, or just simply by
the fact whether or not the project survived the complex setting of multiple stakeholders with
different and conflicting objectives and standards of practice.

Strong leader project selects its direction by creating strong independent culture and feeling of
the importance of making the project successful. This means that a strong leader establishes and
adjusts its own goals and objectives in its stakeholder network. Furthermore, a strong leader
organizes the project from inside out by creating a governance umbrella where stakeholders are
positioned in purposeful roles while some stakeholders may even be deliberately excluded from
the overall governance scheme. The success of a strong leader may be measured by the project’s
internal capability of creating a unique view of perceiving the world and establishing purposeful
goals and objectives for the project, capability of using specific stakeholders as resources, and
capability to change stakeholder salience (or stakeholders’ power to influence the project). These
kinds of success issues are necessary for the ultimate success measured by the overall impact of
the project to the society and its environment as whole, and not by whether the project
contributes to strong stakeholders’ businesses.

CONCLUSION

In the existing literature, a project’s approach to its existing environment in its strategy is often
limited by the assumption that the project must obey its parent organization’s directions and the
parent organization’s business strategy, respectively. In fact, these assumptions in the existing
literature force us to adopt a viewpoint where project is not necessarily an independent temporary
organization, but a project is just an extension of the parent organization. These assumptions
assume that projects are at tactical level, as compared to the strategic activities at the senior
managers’ level. This conceptual narrowness in project strategy definition leads to empirical
studies that just analyze strategies of individual projects as if the strategies of those projects
would be the same as the respective strategies of their parent organizations. We consider that this
is a problem especially in the context of large projects with multiple stakeholders, each of them
having their own business strategies.

We have reviewed extensively literature on project strategies from multiple viewpoints and
developed a definition for project strategy, which allows a more open interpretation about the
content of the strategy as well as processes of strategy formulation and implementation. Our
project strategy definition is: Project strategy is a direction in a project that contributes to success
and survival of the project in its environment. This project strategy definition can be used to
expand understanding of different alternative project strategies, of which we introduced four
types: obedient servant, independent innovator, flexible mediator, and strong leader. The
alternative strategies were differentiated by different degrees of project autonomy, and the
number of strong stakeholders as important parameters in a project’s environment.

By suggesting a definition for the project strategy and introducing four project strategy types, our
paper contributes to new knowledge in a rather significant manner. There are two major reasons
for this. First, proper project strategy definitions or suggestions for definitions are lacking in the

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existing literature. The conclusion from existing project strategy definitions is that they are
mostly implicit descriptions that list potential strategy elements or discuss the strategy of an
individual project by illustrating mere strategy formulation processes. Second, there are many
different kinds of conceptions of what project strategy is, and each conception seems to be either
too narrow or too context-specific to serve as a generic definition for different kinds of strategies
that exist in projects. Our project strategy definition is a rather generic definition that is designed
to allow for different kinds of project strategies that individual projects may have. The project
strategy definition suggested by our paper:

• Focuses on understanding of the project strategy in different contexts characterized by

one parent organization or several strong stakeholders, and different degrees of project
autonomy.
• Allows for various interpretations of strategy, where strategy can be a plan-like
description created in the front end of the project life cycle, but it also can be some other
scheme – for example, a self-originated scheme within the project - that would provide
direction to the project.
• Allows for both an assumption that project strategy would be a set of static objectives,
static plans, or static procedures or mechanisms, or an assumption that project strategy
would be a dynamic scheme.
• Does not assume any specific types of processes or pre-determined processes for project
strategy formulation or implementation, but allows also an assumption that project
strategy could be created continuously throughout the whole lifecycle of the project.
• Assumes that the project’s strategy is own and original strategy of the temporary project’s
organization, and as the project’s organization is different entity from its parent’s
organization that belongs to the project’s external environment; thus, the basic
assumption is that the project’s strategy is different from its parent’s strategy –
independently of the fact whether parent’s and project’s strategies are not aligned, or
aligned by using specific processes for strategy definition and alignment.

THEMES FOR FUTURE RESEARCH

We propose that our generic definition of project strategy introduced in our paper provides a
fruitful foundation for further research on more detailed understanding of the project strategy
content as well as formulation and implementation of project strategies from process perspective.
Such further research should take into account the dynamic nature of the project strategy,
meaning that strategies are dynamically created and they also change during the project life-
cycle. We suggest future research on the following themes.

Empirical research is needed for acquiring deeper understanding on the contents and dimensions
of the four types of strategies. What is the more specific nature of each of the four different
project strategies? Which strategies are the most appropriate in different contexts, i.e., what are
their real success factors? The practical value of the four types of strategies, created in this paper
based on synthesis of existing research, should be shown by empirical research. There is a need
for research on how the four project strategies relate to the project’s success.

Empirical studies should address especially the issue of how different types of project strategies
are formulated and implemented. What are the routes through which successful project strategies
emerge? Who are the strategists in projects? What risks are related to different project strategies?

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A stakeholder perspective on project strategy represents one specific research theme, with an
aspect of understanding how project strategy is formulated and implemented, and how it evolves
across a network of several stakeholders, each with different and even conflicting objectives
concerning the project at hand. Which kind of approaches do project stakeholders use in the
different phases of the project to influence project strategy? Which factors determine whether
project strategists take into account stakeholder’s strategy and interests in the formulation and
implementation of project strategy? What are successful approaches for managing multi-
stakeholder project strategy creation process?

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