Management control in multi-project organizations: a study of R&D companies

Paper submitted to Accounting, Organizations and Society July 30, 2003

Jrgen Dahlgren, hD School of Management Linkping University SE-5 ! " L#$%&P#$' S(E)E$

Corresponding author: Jonas !derlund, hD School of Management Linkping University SE-5 ! " L#$%&P#$' S(E)E$ email* +onso,eki-liu-se .el- /01 !" 2 0315 4a5- /01 !" 2 ! 6"

Management control in multi-project organizations: a study of R&D companies

"#stract
.here is a 7idespread acceptance that organi8ing by pro+ects is on the increase- 9esearch has developed considerably in recent years and various perspectives have been launched: and elaborated on: in order to increase our understanding of pro+ects and pro+ect management- .he focus has traditionally: ho7ever: predominantly been on pro+ect-centric approaches: do7nplaying organi8ation- or company-7ide matters in firms 7hose financial performance largely depends on the success of pro+ects- (e 7ould argue that the understanding of pro+ects must also be directed to7ards such company-7ide matters- #n the present paper 7e focus on the management control and especially the formal control strategies and control mechanisms utili8ed by firms operating by pro+ects-

.he present paper focuses on ho7 multi-pro+ect organi8ations solve the problem of linking its activities to each other and to the organi8ation as a 7hole by the use of various formal control mechanisms- ;ased on a multiple-case study of four 9<) units=companies: 7e propose a typology 7ith four different kinds of multi-pro+ect settings- .he typology is based on t7o dimensions: dependency bet7een pro+ects and pro+ect uncertainty- .heoretically: the paper contributes to the literature on multi-pro+ect management: pro+ect portfolio management and management control in pro+ect-intensive companies-

Keywords* pro+ects: pro+ect management: matri5 organi8ation: multi-pro+ect organi8ation: management control: adhocracy: 9<)-

%& 'ntroduction
#n many industries and sectors: pro+ects are on the increase as a 7ay of improving corporate efficiency and effectiveness in terms of innovation: action orientation and motivation of employees >Ekstedt et al: !???@ (hittington et al: !???A- 4or many companies: pro+ects even represent the basic commercial activity- B number of researchers have taken this development as a starting point for launching various research initiatives in order to increase our kno7ledge about pro+ect management- 9esearch about pro+ect management has been reported in many of the leading management and organi8ation research +ournals >see e-g- Lindkvist et al: !?? @ Lundin < Sderholm: !??5@ Shenhar < )vir: !??1- .his research has covered many aspects of pro+ect management but: so far: the principal thrust has been on focusing the individual pro+ect: its characteristics and its management and organi8ation-

Blthough the study of ho7 to organi8e and manage an individual pro+ect is generally relevant and important: for those organi8ations that run several pro+ects simultaneously as a multipro+ect operation: the 7ider and fundamental issues of organi8ation-7ide coordination and control bet7een pro+ects need to be addressed- (ith a set of concurrently ongoing pro+ects: these issues need to be vertically linked to the strategy of the organi8ation as 7ell as hori8ontally to each other- .he conte5t for the latter coordination can further be e5pected to vary from situations 7here pro+ects are operationally completely unrelated to cases 7here pro+ects are mutually dependent upon each other: thereby creating operational dependency;ased on this observation: several researchers have argued for the need to study management control and company-7ide aspects of pro+ect-based companies >Eng7all: 233"@ Cobday: 2333@ Midler: !??5A- .hese authors: it seems: advocate a 7idened perspective for the analysis of pro+ect-based operations in general- Such a 7idening of perspective: 7e submit: needs to link research on pro+ect management to a traditional organi8ation and management studies (

perspective- (e also believe that such a 7idened perspective contributes to the general understanding of management control in kno7ledge-based pro+ect-intensive firms by illuminating both the relationships bet7een pro+ects and the management control activities in professional 7ork- #n recent contributions in the area of management control emphasis has been put into the control activities of single pro+ects >)avila: 2333@ $andhakumar < Dones: 233!A- .hese contributions point to the general importance of the study of management control in pro+ect environments- Co7ever: limited attention has been given to the relationship bet7een pro+ects: a relationship that 7e believe is eEually as important as the study of the single pro+ect- Bs 7ill be demonstrated in our empirical studies: it also seems like the management control activities and the dependency bet7een pro+ects represent a fundamental challenge for many 9<) companies-

.he present paper contributes to our understanding of management control in multi-pro+ect organi8ations >MPFsA- Fur focus is thus primarily on formal control strategies >Simons: !??5A in 9<) companies 7ith a high degree of kno7ledge development and engineering capacity- Co7ever: 7e give special consideration to the management control strategies for handling the activities and relationships bet7een pro+ects- #n doing so: 7e adopt a contingency approach in comparing the different control strategies in MPFs >cf- Ghenhall: 233"@ 'erdin < 'reve: 233"A-

.he paper is structured in the follo7ing 7ay- 4irstly: 7e 7ill present a general discussion and analysis of management control issues and problematics in MPFs including a summary of previous research- Secondly: 7e describe the methodology used in the empirical studies: 7hich are presented in the third section- #n the fourth section: the cases are analy8ed and a

typology is offered 7ith respect to mechanisms of control used in the companies- .he paper ends 7ith the main conclusions of this paper-

$& re*ious research on M +s

Multi-pro+ect management normally means the management of a set of many pro+ects >Gusumano < $obeoka: !?? A- #n some firms it could be the management of as fe7 as three pro+ects: 7hereas in other firms it could be hundreds of pro+ects- Glosely related to the concept of multi-pro+ect management is 7hat has been referred to as program management: platform management and pro+ect-based management >Sderlund: 233"A- .he literature is not al7ays clear about the relationship bet7een these terms: but it should be noted that the term multi-pro+ect management 7as introduced at a later stage than: for instance: program management- Program management 7as introduced at about the same time period as pro+ect management >Brchibald: !?61A- Program management has to do 7ith ho7 a set of closely connected pro+ects 7as handled- .he first cases of program management 7ere reported from the US defense industry: most notably $BSB: and the aircraft industry >Sayles < Ghandler: !?6!A- #t is thus 7orth noting that in the early days of management research: the development of pro+ect management 7as closely related to the management activities and the integration processes of the set of pro+ects-

#n recent years: research on multi-pro+ect management has 7itnessed a rene7ed interest from both researchers 7ithin the field of pro+ect management >e-g- Bnell: 2333@ Eng7all < Derbrant: 233"A: and from researchers on product development >Gusumano < $obeoka: !?? A.he gro7ing interest is presumably e5plained by the fact that the success or failure of a single

pro+ect is in many cases e5plained its relationship to other pro+ects- GonseEuently: success cannot be studied and e5plained only by studying the single-pro+ect level >Pinto: 2332A-

.here are: ho7ever: some additional management trends that can be observed empirically 7ithin this area- Fne is the development of HplatformsI 7ithin many product development conte5ts >e-g- automotive industryA: 7hich makes the pro+ect-level increasingly much more complicated- .he dependencies bet7een on-going pro+ects are e5panded: creating a need of coordination on a higher organi8ational level- Similar observations are found in other industries >see e-g- Meyer < Lehnerd: !??6A-

.he matri5 organi8ation is one organi8ational solution that has been suggested to deal 7ith multi-pro+ect conte5ts- Co7ever: the number of studies on matri5 organi8ation in real-life is limited >cf- %night: !?61@ 4ord < 9andolph: !??2A- 9esearch often points to the advantages of a HbalanceI in the matri5 >%at8 < Bllen: !? 5A- #n the present paper: 7e 7ill not discuss the various balances in matri5 organi8ations: but instead 8ero in on 7hat 7e argue are other important parameters for understanding multi-pro+ect organi8ations- Mint8berg >!? "A: for instance: in his analysis of the adhocracy claims that 7e kno7 relatively little about pro+ectintensive companies in 9<) settings- Cis analysis is predominantly on a general level discussing various types of coordination mechanisms compared to other types of organi8ations=configurations- Co7ever: the analysis of the differences bet7een adhocracies >cf- multi-pro+ect organi8ations in 9<)A is very limited- 4or instance: the need for creative and innovative 7ork is considered to be the key in adhocracies: but although this generally holds true also in the type of companies that 7e have studied: the need for control and standardi8ation is also a fundamental condition- Bnother important aspect is the pro+ect dimension: 7hich Mint8berg highlights by referring to a number of classic pro+ect

management te5ts- Ce does not: ho7ever: take into account the multi-pro+ect aspects and problems that confront the management of 9<) companies- Mint8berg refers to Hmutual ad+ustmentI as the key coordination mechanism in pro+ect-intensive 9<) companies- .his particular control strategy seems nevertheless too underspecified to grasp the differences bet7een multi-pro+ect organi8ations in development and comple5 conte5ts- Glosely related to the 7ork by Mint8berg is the seminal 7ork of Simons >!??5A 7ho points to various control strategies in contemporary organi8ations- Ce specifically illustrates the relationship bet7een management control and the pro+ect management systems- Ce does not: ho7ever: focus on the various logics and strategies in handling the operative dilemmas of multi-pro+ect organi8ations-

Bs 7as pointed out in the introduction: most of the research on control in relation to pro+ects is focused on intra-pro+ect control in terms of 7ork breakdo7n structures: budgets: deadlines etc >see Packendorff: !??5: Sderlund: 233": for revie7sA- .his is obviously an important area for pro+ect management and for the control of the single pro+ect- ;ut +ust as control of individual activities is not sufficient in an organi8ation: intra-pro+ect control must be supplemented by inter-pro+ect and organi8ational control- Bs pointed out by Jan der Mer7e >!??6*22"A: there is almost no research on pro+ects from business and company-7ide perspectives- .he traditional research on pro+ect control: 7e submit: must be 7idened to also include aspects and concerns outside the individual pro+ects- (e thus argue that research must be directed to7ards the relationships bet7een pro+ects: ho7 9<) companies solve the dependencies bet7een pro+ects and 7hat ma+or control strategies that seem to dominate in such companies-

(& Control pro#lems in multi-project settings

#n terms of control: every organi8ational management faces five fundamental problems* to define organi8ational purpose: to create a division of labor: to coordinate the activities: to motivate members of the organi8ation and to develop and adapt the organi8ation and its activities in face of a changing environment- .hese are the same problems regardless of 7hether the organi8ation is pro+ect-based or not-

.his paper does not focus on the strategic: motivational or the learning issues: but concentrates instead on ho7 problems related to division of labor and coordination in an environment characteri8ed by varying levels of uncertainty can be solved- )ivision of labor and coordination represent t7o sides of a coin- .he traditional organi8ational solution to the problem of balancing differentiation and integration is the hierarchy >La7rence < Lorsch: !?1?A- .he organi8ational hierarchy e5presses both the division of labor and the 7ay cooperation should take place both laterally and vertically- Blthough hierarchy 7ill still be used in every organi8ation: it also seems reasonable to assume that in MPFs this mechanism has to be supplemented by others- #t also seems reasonable to assume that 7hat other mechanisms and control instruments that are used is contingent upon the relations both bet7een pro+ects and bet7een pro+ects and the organi8ation-

4rom a control perspective: pro+ects in the companies that 7e have studied present some additional characteristics that influence the 7ay the control strategy and systems are designed(e believe the follo7ing ones to be the most important ones for an analysis of the management control strategies* the focus on a speciali8ed task: often in close cooperation 7ith a customer: makes direct control less applicable and instead reEuires decentrali8ed or delegated control:

the fact that participation in pro+ects is limited in time: often also part-time: makes leadership: authority and responsibility more complicated: constantly upsetting any attempt to a more permanent structure:

the need to maintain and develop speciali8ed competence must be reflected in organi8ational responsibilities: and

pro+ects vary in terms of uncertainty in relation to both appropriate activities and e5pected outcome-

Bccordingly: a contingency frame7ork for the management control in multi-pro+ect organi8ations must take these issues into account- Blthough some researchers have reached the conclusion that Hclassical management cannot applyI >.urner < %eegan 233!A: 7e believe that nothing suggests that radically ne7 mechanisms or instruments are reEuired: but that the traditional instruments must be adapted and configured in accordance 7ith the specific conte5t- #nstead: 7e 7ould argue: a contingency frame7ork must rest upon the understanding put for7ard by classic organi8ation and management studies and modified to fit the specific challenges facing multi-pro+ect organi8ations in 9<) settings-

3.1 Management control and the rinci le o! de artmentalization

.he t7o classical models for departmentali8ation are structuring by function >salesproduction-purchaseA or by purpose >product=customer=geographical areaA >'albraith: !?6"A.he respective advantages of these t7o forms are 7ell kno7n- 4unctional structures optimi8e attention to speciali8ed kno7ledge 7hile purpose structures focus the needs of the market.he fundamental business process of many pro+ect-based companies is to develop and apply

speciali8ed kno7ledge in different pro+ects- GonseEuently: the need for a primary focus on such speciali8ed kno7ledge 7ould seem to lead to a U-form as the preferred organi8ational structure >(illiamson !??6A- .he departmentali8ation of the organi8ation 7ill then be based on the different types of speciali8ed kno7ledge that is reEuired in each pro+ect- #n a U-form structure pro+ects are established by combining resources from different functional specialties forming a temporary pro+ect team- .he participation of each member in the pro+ect group is often part time and basic kno7ledge development occurs outside the pro+ect-

.he need for speciali8ed kno7ledge might be a fundamental characteristic for certain pro+ects#n general: ho7ever: organi8ational activities in the form of pro+ects by themselves can represent Hself-containedI activities 7ith specific purposes: specific clients: specific time limits and 7ithin specific economic frames- #f then the reEuired degree of speciali8ed kno7ledge is more limited: departmentali8ation need instead be based on an M-form structure 7here the pro+ects make up the self-contained components typical for that structure-

3.2 Management control and de endencies

)epartmentali8ation leads to differentiation: 7hich introduces the problem of Hkeeping the act togetherI and conseEuently creates a need for organi8ation-7ide integrative mechanisms and instruments- E5amples of dependencies are that pro+ects sometimes dra7 on the same resource base in the line organi8ation and that organi8ational profits are the combined results from each and every pro+ect- B loss on one pro+ect certainly can potentially impact negatively upon the financial resources available for other pro+ects-

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.he main result from the La7rence and Lorsch study 7as that high performing organi8ations use different integrative devices in order to cope 7ith different levels of differentiation- #n a pro+ect conte5t: one such category is made up of companies 7ho: although needing to adapt to each and every client: basically sell the same standardi8ed program 7ith the same standardi8ed implementation process- .o this category belong many soft7are and consulting organi8ations- Bt the other end of the scale are companies 7ith large and uniEue pro+ects: involving development activities and 7ith a high degree dependency in terms of resources: e-g- people and kno7ledge- #f variation 7ere great bet7een pro+ects: one 7ould e5pect integration through special integrative units or permanent cross-pro+ect functions- #f on the other hand all pro+ects are basically the same: integration could be created through hierarchy or standardi8ed systems-

#n order to understand the link bet7een control structure and dependency: one needs to further e5plore the nature of dependency- Co7ever: far apart pro+ects in an organi8ation may be in terms clients: resources: kno7ledge: scale etc: since they +ointly generate the profits for the organi8ation: there is al7ays a pooled dependency 7hich emanates from being part of the same organi8ation- .his idea of a pooled dependency also applies to shared resources like management: development laboratories: people and systems- Bccording to .hompson >!?16A: the basic control mechanism in this case 7ould be standardi8ation- Each pro+ect must follo7 certain rules of behavior 7hen it comes to planning: budgets: follo7-ups: hiring and firing: reporting etc-

Bpart from pooled dependency: the relation bet7een pro+ects can also e5hibit the characteristics of mutual or reciprocal dependency- Such a situation occurs 7hen one pro+ect feeds into another pro+ect: 7hich in turn provides input to the first mentioned pro+ect- .his

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happens: for instance: in commercial pro+ects that include development activities- .he necessary kno7ledge for the development could 7ell be derived from a separate pro+ect: 7hich in turn then needs to kno7 the conditions for the commercial pro+ect- Such a situation calls for control by mutual ad+ustment-

4inally: there could also be seEuential dependencies: meaning that one pro+ect produces the input for another pro+ect and it needs to be completed before the second pro+ect can start.raditional intra-pro+ect planning models like GPM and PE9. 7ere developed to model seEuential dependencies- #n general: this type of dependency calls for control by plans to coordinate activities-

9elating this discussion to management control in MPFs one 7ould: given the fact that pro+ects more than ongoing operations are characteri8ed by a high degree of inter-pro+ect independence >o7n budget: o7n ob+ective etcA: first of all recogni8e the pooled dependency aspect and conseEuently the need for standardi8ation- #t is to be e5pected that multi-pro+ect organi8ations have developed rules of conduct to guarantee standardi8ed behavior in the pro+ects: e-g- standard pro+ect management models: such as P9#$GE and P9FPS- .he link bet7een pooled dependency and standard operating procedures has also been demonstrated by Macintosh < )aft >!? 6A- .he situation here is similar to 7hat Scott >!?15A denotes as Hheteronomous organi8ationsI: 7hich display a high degree of independence on the vertical a5is- #n such organi8ations: delegation is used to handle the independence: but since delegation means a local right to take decisions according to centrally laid do7n principles: this in fact is a type of standardi8ation- .he independence of pro+ects: coupled 7ith uncertainty: presumably also leads to an increased importance of control through Hbeliefs systemsI >Simons !??5A- 4inally: if mutual dependencies also are at hand: these are likely to

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lead to the establishment of Hcross-pro+ect interactionI and information e5change and seEuential dependencies are handle through plans: e-g- budgets and statistical reports >Macintosh < )aft: !? 6A-

)& Research 2uestions

.he previous sections have intended to stress firstly the need for better kno7ledge of control in multi-pro+ect organi8ations: and secondly to link the strategies of control in MPFs to traditional organi8ational control theory- Fur argument is that in order to increase our understanding of different types of multi-pro+ect conte5ts both conceptual development and additional empirical research is reEuired .he aim of this paper is therefore to elaborate on a model or typology based on both insights into traditional organi8ation theory and some key traits of 9<) pro+ects- 4ollo7ing this: the t7o research Euestions addressed in this study are*

!- Co7 are multi-pro+ect organi8ations controlled in order to achieve integration and resolve dependenciesK 2- Co7 and 7hy do control mechanisms vary bet7een different multi-pro+ect conte5tsK

.he model offered 7ill be illustrated by e5amples from the case studies presented belo7-

,& Methodology

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.he methodology applied for the studies reported in the present paper could best be described as a multiple-case study- Such an approach is most applicable in situations 7here the researcher 7ants to both get a closer in-depth understanding of particular social phenomena: and be able to make comparisons bet7een various conte5ts- Bs a matter of fact: the main reason for including more cases than one in theory development or refinement pro+ects: is that the researcher e5pects a variations bet7een different cases in different situations4urthermore: the use of multiple cases makes it possible to develop typologies >$ormann: !?61A-

Eisenhardt >!? ?A points to the importance of logic behind the choice of different cases- #n the present study: the logic has mainly been that 7e 7anted to cover different industrial settings* in our case 9<) companies=units 7ithin larger corporate groups- (e also 7anted to cover settings that varied along the follo7ing lines* number of pro+ects: linkage bet7een pro+ects >e-g- dependency of the same resources: engineers: etcA: functional department or pro+ect focus-

.he study started 7ith a number of intervie7s at each company in order to get a first understanding of the conte5t: strategy and overall organi8ation of each of the firms- Bfter that 7e made a first analysis and tried to categori8e the companies included in our studySubseEuently: 7e did a fe7 >2-"A intervie7s 7ith pro+ect managers or pro+ect directors in order to focus on the formal control mechanisms applied in each of the firms and also get a better understanding of the various types of pro+ects in the firms- Bppro5imately: four or five persons 7ere intervie7ed in each company- .he first draft of each case study 7as distributed to one or t7o key actors in each firm- (e 7anted to use several Euotes from the intervie7s in

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order to get a real-life story and also to increase the trust7orthiness of the case studies presented in the paper-

)uring the 7hole research process 7e studied various types of literatures that 7e believed 7ere of interest in a multi-pro+ect management conte5t- (e therefore included fairly broad organi8ation theory literature on matri5 organi8ation and adhocracy: but: of course: also the literature focusing entirely on multi-pro+ect management- Fur basic assumption 7as that the t7o strands of research are Euite closely related but much research in the pro+ect management stream does not fully recogni8e the linkage to traditional organi8ation theory- (e thus tried to balance these streams of research and set out to integrate them and focus specifically on formal control mechanisms-

#n terms of theory development: it is important to understand 7hat it is that is generali8edBlthough case studies are an e5cellent vehicle for producing Hrich storiesI: it is not the specifics of the case that are generali8ed: but rather Hthe general in the specificI >;a5ter < Ghua: !?? * 3A- Fur purpose is thus to theori8e about Hchronic behavioral and social issues that are e5emplified in and by our case studiesI- Bn essential prereEuisite for finding such chronic behavioral=social issues is theory- (ithout theory: any identification of general themes is likely to lead to a fragile construction 7here local conditions are allo7ed to influence conclusions in a manner that gives results that are at best interesting: but 7ithout any general significance-

.he cases in our study come from different settings- .hree come from the mobile telephone industry and one from the aerospace industry- #n the aerospace industry: the 9<) is close to basic research: 7hereas the other three can be characteri8ed as applied research: or

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development- .he Euestion might then be asked 7hether the similarity is sufficient for allo7ing generali8ations- Since all pro+ects are development pro+ects: only limited comparison can be made 7ith other pro+ect types: e-g- construction pro+ects or consulting pro+ects-

4irst: one must keep in mind that 7e are not setting out to generali8e one concept or one model to all types of organi8ations- Fn the contrary 7e are looking for variations bet7een organi8ations in order to map that variation in our model- .he variations are: so to speak: a basic platform for us: not something that impedes or threatens generali8ations- Secondly: our model clearly recogni8es the differences bet7een: for e5ample basic research and applied research: in terms of the amount of uncertainty involved- Fn a general level: there may of course be many other differences bet7een the industries: organi8ations and 9<) activities: but to refer such differences to the role of background is: of course: at the heart of any modelbuilding approach- .hirdly: and finally: 7e believe that by using general theoretical concepts from organi8ation theory: such as uncertainty and dependency: 7e believe that 7e are addressing themes that are relevant to all our cases-

-& Case studies

;elo7 7e present four case studies- (e give an overall conte5tual description of each of the companies- B summary of the cases and some additional information 7ill be given in a summari8ing table of the cases-

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".1 #ase 1$ Saa% Aeros ace &uture 'roducts

Saab Berospace develops aircraft systems and sub-systems primarily for military markets.hey also 7ork as sub-supplier and manufacturer for large civil aircrafts- .he 4uture Products division is one of three business areas 7ithin Saab Berospace- (ithin this business area most 7ork is oriented to7ards developing defense technology for the future- #t is thus a very hightech environment and the level of engineering skills of the division is 7ell kno7n and recogni8ed- Blong side the long-term development 7ork: the division also develops systems and products that support the current operations of the Saab 'roup L from manufacturing process to customer support- .he business has a clear orientation to7ards Hnet7ork defenseI in the sense that it develops defense systems that integrate management: information and operations to function po7erfully in a net7ork- .he division 7orks not only 7ith other parts of the Saab 'roup but also 7ith a number of international partners and in various types of consortia-

.he number of employees amounts to +ust above "33- .he production activities of division are organi8ed into the follo7ing four departments* Product )evelopment: System .echnology: Fperations Bnalysis and Bdvanced )esign- #n these departments the development of the products is carried out- #n addition: there is also a department for the marketing and sales of the products 7hich reports directly to the top management of the division-

4uture Products is organi8ed as a matri5 organi8ation- .he four departments make up one dimension and five program areas the other- .he departments supply kno7ledge and resources to the program areas: 7hich are the organi8ationMs operative units: i-e- the programs are responsible for getting and completing the contracts- Each of the departments consists of a

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department head and a number of pro+ect managers- .he pro+ect managers report both to the department head and to the program manager- .here is one program manager for each of the program areas: i-e- five program managers in total-

.oday the line managers have more po7er than the pro+ect managers- .he pro+ect manager is responsible for 7hen and 7hat should be done@ the line manager is responsible for appointing the right person for the +ob: for determining ho7 the +ob should be done and 7hat methods and technologies that are most appropriate for the +ob at hand-

H.he line manager often thinks that he should control the 7hole 7ork package and that the pro+ect manager only should look after the financial figures- .his creates an imbalance in the 7ork: 7hich is e5plained by the fact that the line managers are not clear about their roles in the organi8ation- =N= .here is a lot of 7ork still to do in order to get this to function-I >Pro+ect ManagerA

B ma+or reason for conflict is the fact that the line managersM responsibility is not clearly defined- Bnother freEuently conflict situation often appears in smaller pro+ects due to fact that in these pro+ects: the line manager often also is the manager of both the resource o7ner and the pro+ect manager- Such situations: often create problems for the pro+ect manager to carry out his +ob successfully-

.he development cycles for 4uture Products are very long: 7hich is typical for the industry as a 7hole- .he development lead-time is often more than five years-

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H#t is possible to look at the replacement need for our main customer- #t is thus possible to estimate 7hat is needed and reEuired in the future and 7hen ne7 products 7ill be neededNit is fairly uncomplicated to give a prognosis on the replacement need-I >)irector of .echnologyA

.he difficulty is instead considered to be deciding on 7hen to start development 7ork in order to reach the market in time- 4urthermore: consideration has to be given to the changing environment: such as political conflicts and ne7 defense alliances-

Bccording to the management team the fundamental 7ay of controlling pro+ects lies in choosing the right ones- .he first phase of each pro+ect is the market analysis in order to be able to set the correct target for each of the pro+ects- #n the second phase: focus is put on potential business and time estimates for the various opportunities-

.he resource estimates are done on a fairly comprehensive level and are based on standardi8ed areas of competence- Suggestions for pro+ects come from several sources clients: supra-pro+ects or engineers in the company-

H.hese are different sources that 7e try to assemble a fe7 times each year- (e evaluate each of the suggestions and let a group of people take a closer look at each suggestion- #t is also this group 7ho is responsible for prioriti8ing bet7een the pro+ects and suggest 7hich pro+ect that 7e should launch in the nearest future-I

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.he company recogni8es that this process is key for competition: 7hich has led management to devise more clearly developed processes and routines for handling the suggestionsCo7ever: they also recogni8e that the process cannot: and should not be: overly standardi8ed-

.he valuation of the pro+ects is not only based on a product level: but is based on other aspects related to the business plan- .he strategies are developed based on five focus areas 7hich make up a kind of ;alanced Scorecard- .he five focus areas are* profit: customer: cooperation: operations and co-7orker-

Most of the 7ork in 4uture Products is carried out in various types of pro+ects- #n total more than 3 percent of the employees 7ork in different types of development pro+ects- .he unit applies SaabMs pro+ect model: PSM >Pro+ect Steering ModelA: and the pro+ect process is relatively standardi8ed- B pro+ect is al7ays initiated by a pro+ect o7ner: even though the suggestion might come from other parts of the firm- #t is also the pro+ect o7ner 7ho appoints pro+ect manager-

".2 #ase 2$ (ricsson )S#

Ericsson ;SG >henceforth ;SGA is a unit 7ithin the Ericsson 'roup- #t is responsible for developing products and services 7ithin the area of base station control- .he unit has a strong line organi8ation and a number of pro+ects that cut across the organi8ation- .he pro+ects are organi8ed and managed by a pro+ect manager: an assistant pro+ect manager- .he rest of the people in the pro+ect are recruited from the line organi8ation- (ithin ;SG: there are four different departments- .he responsibility for making priorities and determining 7hich pro+ects

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that are to be launched falls on the systems department- .he integration and verification department is responsible for verifying that the developed product 7orks according to the specification and that the product is reliable- Bpart from these t7o departments: t7o so called pro+ect offices are also part of the organi8ation- Fne of the offices has the main responsibility for developing the product from development to product delivery- 4ormally the assignments from the strategic product management are directed to this pro+ect office- .he second pro+ect office is responsible for support: i-e- customer support- ;oth pro+ect offices borro7 resources from the line organi8ation and from design and support units around the 7orld- .he design units 7ithin the ;SG organi8ation are geographically dispersed to )ublin: Linkping: )allas and London- .he design units are separate companies but fully o7ned by the Ericsson 'roup.hese companies have different competence profiles and are responsible for developing the functionalities that are to be part of the pro+ect- .he assembly and final test of the product is done in the ;SG unit in Linkping- .he design companies also support and 7ork on other pro+ects 7ithin the Ericsson 9adio Systems company-

.he ;SG organi8ation also includes a steering committee- Every manager is a member of this committee and the local design unitsM managers are also represented- .he committee makes decisions on the pro+ectsM strategies: directives and changes-

.he ;SG unit has three parallel pro+ects that are so-called main pro+ects- .hey are primarily soft7are pro+ects- .he three pro+ects are in different phases of the pro+ect lifecycle- Fne is in the pre-study phase: one in implementation and one in the conclusion phase- Bpart from these three main pro+ects: a number of other smaller pro+ects are also carried out- .hey follo7 a more simplified process compared to the main pro+ects- .hese pro+ects are normally minor

$%

changes on the current platform or additional services that are possible to separate from the main pro+ects and do not fit the overall time plan of the main pro+ects-

HB fe7 years ago 7e designed 7hole packages: an entire release 7ith design: testing and verification- .hat could take up to three or four years- $o7 7e try to divide the package into smaller parts 7hich makes it possible to release the first package after: for instance: one year-I >Bssistant Pro+ect ManagerA

.he main pro+ects are the principle agenda setters for the management team-

HOou can look upon the main pro+ects as Hsoft7are trainsI L 7hen the first train is fully loaded 7ith the right functionality: you can release it-I >Manager: ;SGA

.he coordination bet7een the pro+ects is sometimes e5tensive-

H.here is some7hat of a dream that you can build pro+ects of stand alone modules- .his is: ho7ever: not possible in real life- .here are a number of interactions that occur under 7ay 7hich creates a number of dependencies on various parts of the pro+ects: not only on the technology side-I >Manager: ;SGA

".3 #ase 3$ (ricsson S*&

Ericsson S94 >henceforth S94A is a unit 7ithin Ericsson 9adio Systems- .he unit 7orks 7ith development of radio base stations and is one of the most important parts for the Ericsson

$$

'roup- .he pro+ects are primarily soft7are pro+ects- .he unit also has a strategic product management 7ith responsibility for the entire product range 7ithin the unit-

B centrali8ed forum called the 9adio )evelopment ;oard makes all the .ollgate decisions for all the main ne7 development pro+ects 7ithin the entire unit- #t is thus 7ithin this board that all the business decisions concerning each pro+ect are made- .he board consists of the manager for S9 >the business areaA: the manager for the strategic product management and each of the sub-product units of 7hich S94 is one- Each of the sub-product units has an operative steering committee 7ith responsibility for each pro+ect- .he operative steering committee consists of the line managers 7ho Ho7nI the resources: the pro+ect office manager: the manager for product management and the pro+ect managers- 4rom time to time line managers from other line units >i-e- from other units 7ithin S9A are also invited if there are aspects of a pro+ect that affects the entire organi8ation- .he unit has decided not to have an overall pro+ect office- .he pro+ect management offices are decentrali8ed and one is thus located in the S94 organi8ation- .he pro+ect management office is responsible for the operative pro+ect planning and the manager for the office is responsible for all the pro+ect managers 7ithin S94- Ce is also the one 7ho appoints pro+ect managers to the pro+ects 7ithin S94 and for coordination bet7een the various pro+ects- Ce is also in charge of the unitMs pro+ect portfolio-

.he organi8ation also includes a special unit 7ith the responsibility for the many sub-pro+ects in S94- Such sub-pro+ects are freEuently geographically dispersed to different parts of S7eden and to design units in Europe- .hese design units 7ork on assignments from the S94 unit-

$(

#n S94 four pro+ects are carried out simultaneously- $ormally each pro+ect lasts for appro5imately three years and the pro+ects are partly overlapping- Every pro+ect employs more than fifty people- Bpart from these three-year pro+ects: a number of smaller pro+ects >longevity: man hours and people employedA are carried out-

Several pro+ects 7ithin the S94 unit do not only have strong dependencies to other pro+ects in the S9 unit but also 7ith other pro+ects in the Ericsson 9adio Systems organi8ation as a 7hole-

H(hen you initially develop a product: you only have one large pro+ect 7hich you focus entirely on- Co7ever: 7hen you have an established product portfolio: you have a completely different situation- Oou must be able to handle a variety of products and a multitude of pro+ects-I >Manager: Strategic Product ManagementA

Bccording to the same manager: the unit has a number of pro+ects that they 7ould like to start or proceed 7ith-

H#t is normally a matter of man hours- (e have a certain budget and 7e cannot hire !333 engineers more if 7e 7ould like- (e have limited pool of resources-I >Manager: Strategic Product ManagementA

.he S9 unit uses the standard Ericsson P9FPS model for controlling pro+ects- .his model is also used 7hen it comes to making priorities bet7een pro+ects- Every ne7 product development pro+ect has to be decided upon by the 9adio )evelopment ;oard- Bfter such a decision >the .' 2 decisionA the responsibility is handed over to the various steering

$)

committees in the unit- #t is the respective steering committee that is responsible for making the rest of the .' decisions throughout pro+ect implementation- ;efore every .' decision a risk analysis has to be made-

.he product management is responsible for setting the reEuirement agenda and collecting information from the customers: the other units 7ithin S9 and the Ericsson 'roup 7orld7ideProfitability is al7ays key in the discussion 7hen it comes to making priorities bet7een pro+ects*

$ormally each unit has one large pro+ect that has the highest priority- #t is also this pro+ect 7hich sets much of the constraints for the other pro+ects 7hen it comes to resources and attention- Ff great importance is also 7hether a pro+ect is in line 7ith the unitMs strategy and operative targets- Co7ever: once in a 7hile: a pro+ect: 7hich is outside the main strategy: is given priority in order to develop ne7 markets or ne7 technologies- Still: every pro+ect has to be based on a clear-cut business case-

H.he critical issue is to understand the dependency that e5ists bet7een the different pro+ects and before 7e start a ne7 pro+ect be able to make an estimation on ho7 that pro+ect 7ill affect the other ongoing pro+ects- (hat are the critical resources in the pro+ect and ho7 7ill the resources be affected by the ne7 pro+ectK >Manager: Strategic Product ManagementA

.he management also emphasi8es the role of communication in managing multiple pro+ects-

$,

H.he best 7ay is to talk to the pro+ect managers about the critical resources in the pro+ects- Co7ever: 7e are currently looking at a ne7 methodology to handle this more formally- # hope that this 7ill improve the management of multiple pro+ects-I >Pro+ect Fffice ManagerA

.he revie7 of each of the pro+ects is normally done in the operative steering committee- .he decisions on 7hether a pro+ect should proceed or be terminated is made by the 9);-

H#t is very painful to terminate a pro+ect that has passed the .' 2 decision-I

$-

".+ #ase +$,elia Mo%ile

.elia Mobile is a company 7ithin the .elia 'roup >a S7edish telecom operatorA- #t 7as founded in !??6 as a pure technology company 7ith responsibility for the development and maintenance of the mobile telephone infrastructure- .he .elia Mobile line organi8ation consists of t7o business areas - the H$et ;usinessI and the H4inal Gustomer ;usinessI- Under each unit: four departments hold the resources that 7ork on the pro+ects- Bdditionally: a development department: 9<): organi8es si5teen pro+ect managers in a pro+ect management pool- .he pro+ect mangers are not only managing pro+ects 7ithin the 9<) unit: but also for the business units $et and 4inal Gustomer- Sometimes the need for pro+ect managers e5ceeds the available number of pro+ect managers- #n these situations: consultants are recruited to assume the responsibility for managing the pro+ect-

.elia Mobile has a number of staff functions one being the pro+ect management office- .his office is responsible for supporting the pro+ect management model and for pro+ect coaching.elia Mobile has three permanent steering committees: one for each of the business units and one that is responsible for the common pro+ects: that involve both the $et and the Gustomer organi8ation- #n each of the business unitsM steering committee: a pro+ect coordinator has the role as contact person for the pro+ect managers and the rest of the organi8ation- .he pro+ect coordinator is also the connecting link bet7een the pro+ects and is the one 7ho suggests priorities to the steering committee-

.he pro+ects in .elia Mobile are of many different types* ne7 platforms to build services on: ne7 platforms for making maintenance more efficient and regulatory pro+ects: i-e- pro+ects that has to be carried out due to legal reEuirements-

$.

#n the organi8ation: it is not clear 7hat really constitutes a pro+ect-

H(hen you live in an organi8ation like us: 7ith many pro+ects: it is very hard to determine ho7 many pro+ects you have going on at the same time-I >Pro+ect ManagerA

.he pro+ects are carried out in parallel and their si8e vary both in terms of time and of engineers employed- Many of the service development pro+ects have longevity bet7een three and fifteen months >ten months on averageA- .he pro+ect teams vary bet7een five and thirty engineers >ten persons on averageA- .he net-development pro+ects have a lifetime bet7een seven months and t7o years >on average fourteen monthsA-

Every pro+ect is put on the pro+ect 7eb: 7hich looks very much like a structured 7eb site- .he pro+ect 7eb is also used for control and follo7-up purposes-

Many pro+ects have a high dependence and there are many pro+ects going on-

H(e have too many pro+ects at the moment- #f 7e 7ould be able to take a fe7 of them a7ay: things 7ould be much better- (e have a problem today-I >Manager: Pro+ect FfficeA

Co7ever: the company has 7orked intensely to improve the pro+ect selection process-

$/

H(e have so many good ideas- .he tricky thing is to decide 7hich of the ideas to go for-I >Pro+ect ManagerA

Priorities bet7een pro+ects have been assigned to a group called $BSB >an abbreviation based on the S7edish 7ords for $et and Gustomer ;usinessesA- .his group has made a priority list divided 7ith four categories- .he time factor and delivery dates are normally the ones driving the prioriti8ation-

H(e have this type of funnel 7here 7e initially have some7hat of a 7ide and open idea generation phase- Bfter that 7e have decision points 7here 7e screen the pro+ects and determine 7hich of the various ideas that should move on to the pre-study phase- 4ollo7ing that: 7e have a decision phase 7here 7e decide on 7hich of the pro+ects that should enter pro+ect implementation- Co7ever: it reEuires tough management to tell committed individuals to terminate a pro+ect 7hich they have been 7orking on for a number of months- # still believe 7e could do better on the entire funnel-process-I >Pro+ect ManagerA-

.& "nalysis

.he analysis section is structured as follo7s- 4irst: 7e 7ill give a brief summary of the case studies presented and do a cross-case analysis based on some important facets of multi-pro+ect organi8ations- .he parameters chosen are the ones that have emerged as key traits from our empirical study and discussions 7ith the people directly involved in the multi-pro+ect

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management of each of the companies- Second: 7e 7ill elaborate on a typology 7hich e5plains much of the control strategies observed in our cases-

Some of the characteristics of the cases described in the previous section can be summari8ed in the follo7ing table*

3'nsert 4a#le % here3

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Bll the pro+ects described in the previous section are development pro+ects and for all case companies such development pro+ects are crucial for the firmsM competition since all companies compete in markets 7here technological advances are reEuired for successPro+ects are conseEuently of vital importance for company survival-

.he relationship bet7een pro+ects and the organi8ational levels above is one of pooled dependency- Bccording to .hompson >!?16A: this can be handled by standardi8ation- #n all of our case companies 7e find the use of a standardi8ed pro+ect model- #n fact all the companies use the same model since SaabMs PSM is actually an adaptation of P9FPS- ;y reEuiring the use of such a model the management of the organi8ation is able to standardi8e behavior in other7ise decentrali8ed operations- #n Ericsson ;SG this standardi8ation is further emphasi8ed by the use of planning constants and stressing the importance of Hglobal thinkingI- .he use of devices like planning constants is of course tied to the similarity bet7een pro+ects in space and time- .he pro+ects 7ithin Saab 4uture products are so different and 7ith such a long pro+ect time that planning constants might not be relevant-

.he organi8ational structure chosen by the four companies varies- .7o companies use matri5 structures: one functional and one a business unit structure- .he matri5 structures seem ho7ever not to be identical since the structure 7ithin Saab is dominated by the line organi8ation- .his presumably reflects a strong emphasis on speciali8ed kno7ledge as the primary success factor in product development- .his kno7ledge has al7ays been the hallmark of Saab in their development of civil and military airplanes and continues to dominate the organi8ation- Fne might therefore Euestion 7hether the structure is not in fact more functional than matri5-

(%

Bs for inter-pro+ect dependencies: this seems to be strongest in Ericsson ;SG and 7eakest in Saab- Mutual dependencies are best handled by creating arenas 7here pro+ects can meet- #n Ericsson ;SG some members 7ork in different pro+ects simultaneously 7hich could lead to information being channeled from one pro+ect to the ne5t- .his is further promoted through monthly progress meetings and a common steering committee- ;ecause of the interdependencies created by the need for a common resource: some resources are not allocated to the pro+ects but remain unallocated and are supplied after special decisions- #n the Saab case: 7ith no real mutual or seEuential dependencies: no common arena is called for-

-.1 #ontrol strategies in M'Os

;ased on our empirical studies 7e are no7 prepared to suggest a control typology for multipro+ect organi8ations- .he typology is based on t7o variables - dependency and uncertainty)ependency is here taken to denote the e5tent to 7hich the success of one pro+ect is contingent upon the result of activities in other pro+ects >inter-dependencyA- .his dependency could be either pooled: seEuential or reciprocal >.hompson !?16A- #n a situation of pooled dependency no direct transactions occur bet7een pro+ects: but instead pro+ects are related through marketing or financial relations- Pro+ects in the construction industry can be an e5ample of this - each pro+ect is independent: but if one pro+ect fails it can effect the customer valuation of other pro+ects and=or lead to financial burdens for them- .he seEuential dependency occurs 7hen one pro+ectMs output is input for another pro+ect- #n our case this happens e-g- 7ith pro+ects in .elia Mobile 7here pro+ects in 4inal Gustomer ;usiness are seEuentially dependent on pro+ects 7ithin $et ;usiness- 4inally: the reciprocal dependency means that pro+ects are involved in an inter-pro+ect e5change- Bn e5ample of this 7ould be

($

the relationship bet7een development pro+ects 7ithin Saab 4uture Pro+ects: 7here technical kno7-ho7 and design in one area has to be adapted kno7ledge and design in other areas and vice versa- Bll pro+ects 7ithin an MPF are inter-dependent: but different conte5ts produce different degrees of dependency-

.he uncertainty of pro+ects is the degree of precision 7ith 7hich the variation in outcome: resources and 7ork process of pro+ects can be forecasted- Every pro+ect: almost by definition: carries 7ith it a certain degree of uncertainty- Pro+ects are in this sense more influenced by environmental changes- Co7ever: the degree of uncertainty varies- #n development pro+ects close to basic research: such as 7ithin the pharmaceutical industry or the aircraft industry: the uncertainty is so great that it also includes the Euestion of 7hether a pro+ect 7ill lead to any outcome 7hatsoever- Fn the other end of the scale 7e find pro+ects like the implementation of a kno7n soft7are system: 7here basically a standard procedure can be applied 7ith more or less 7ell-kno7n result- Bs is clear from the discussion above: no company can easily be grouped according to one situation- #nstead: 7e need to dra7 on ideal type reasoning in order to e5plain the variances observed in our cases- (e 7ould argue that the companies have some aspect of dependency and uncertainty: but that they differ in some respect along these lines-

Gombining the dependency - uncertainty dimensions gives rise to the follo7ing matri5*

3'nsert 5igure % here3

.he matri5 above gives us four types of situations- 'iven the characteristics of each situation 7e can no7 link each such situation to a suggested appropriate control strategy- Since all MPFs are thought to contain dependencies and uncertainty: the resulting typology can best be

((

thought of as a staircase: 7here the control instruments used in the PsimplestM situation >#A are also to be found in the most comple5 >#JA-

#n situation # 7e find a situation 7here pro+ects sho7 a high degree of independence and lo7 uncertainty- Empirically 7e find these MPFs involved in rather standardi8ed pro+ects 7ith little resource sharing or e5change of services- .o say that the pro+ects are standardi8ed does not necessarily mean each pro+ect needs to be identical to other pro+ects- #n the construction industry not all buildings are alike: but they do rely on a common kno7ledge base and common methodology-

4rom a control perspective the limited inter-pro+ect dependency poses no real problem- .he control problem for the organi8ation is instead to maintain the focus on the routines and standard operating procedures- #n MPFs the strongest instrument for this is the pro+ect modelEach pro+ect is reEuired to pass through certain phases 7hich end 7ith a tollgate decision and include pre-specified activities that should produce the basis for the tollgate decision- Bll our case companies use the same pro+ect model: P9FPS >or variants thereofA- Fther means of standardi8ation can be the use of planning constants >EricssonA- .he control strategy for this type of situation can be called 9outine-based Gontrol-

Situation ## differs from the previous in the sense that although the pro+ects still display a lo7 degree of uncertainty@ they are dependent on each other- Jery often this dependency takes the form of one pro+ect being dependent on activities in another pro+ect being completed before the first pro+ect can start or to progress e- g- a certain development pro+ect reEuires for its completion a module 7hich is processed by another pro+ect- Since uncertainty is lo7: there is in this situation a possibility to use plans as a coordinating mechanism- Bn e5ample of this

()

can be found in Ericsson 7here all the functionality and the dependencies bet7een the functions are described in 7hat is kno7n as anatomy plans- .he plan consists of rings 7here each ring denotes a certain functionality and 7here each ring is dependent on the functionality defined by the neighbouring ring closer to the centre- #n case of lack of time: the outermost rings can be e5cluded- #n the case that not all coordination can be solved by plans: MPFs in this Euadrant turn to simple coordinating devices such as coordinating committees- ;ecause of the reliance on plans: the control strategy for this situation is termed Planning-based Gontrol-

#n conte5ts 7ith high uncertainty >### and #JA: plans can no longer be relied on as the main control mechanism since plans reEuire a certain level of stability- ;ecause of the uncertainty controlling reEuires close attention to the e5tent that the organi8ationMs management does not have the ability to monitor the pro+ects personally- .he uncertainty therefore typically reEuires a decentrali8ed control 7here pro+ect management is vital for the success of a pro+ect- #f pro+ects are rather independent from each other >###A: no special inter-pro+ect coordination needs to be established and the control issues therefore centers more or less on the Euestion of controlling a portfolio of pro+ects each 7ith a high degree of uncertainty- Empirically 7e believe that such a situation can be found in the pharmaceutical or bio- technical industry 7here each development pro+ect has rather uncertain prospects: but 7here each such pro+ect is basically self-contained- 4rom a control point of vie7: standards could be set and plans be made but they are of limited use since the intensity of the activities and the results thereof tend to follo7 their o7n logic and not some pre-determined plan- 9ather than 7ith output and=or process: the basic control mechanism is instead to be found on the input side- .here are t7o fundamental resource decisions that lay the ground for control in this case- .hese are the choice of pro+ect manager >managementA and the resources allocated to the pro+ects- Since uncertainty precludes the reliance on plans: the problem of controlling the pro+ect becomes

(,

the problem of choosing a pro+ect manager 7hich to the best of his abilities acts in the 7ay that the management of the organi8ation 7ould have done had they had the time and competence- .he focus here 7ill be very much on the belief system of the pro+ect management team- (e call this control strategy 9esource-based Gontrol-

4inally: 7hen dependencies are high and uncertainty great: the resulting situation >#JA is the most e5acting from a control perspective- .he decentrali8ed control through pro+ect managers from the previous situation must be retained: but on top of that because of inter-pro+ect dependencies: some means of coordinating this dependency must be found- Empirically 7e might e5pect to find these situations 7here pro+ects contain elements close to basic research and 7here development pro+ects 7ithin different functional areas display reciprocal dependencies like in the aircraft industry- #n cases like this the solution lies in introducing 7hat .hompson calls an Hover-arching second-order groupI >p- 5?A- Such a group can also be found at Saab 4P that has created the function of program management 7hose task it is to coordinate bet7een products- .he control strategy is therefore named Program-based control.he follo7ing figure and table summari8es the discussion-

3'nsert 5igure $ here3

3'nsert 4a#le $ here3

/& Conclusions
#n many contemporary firms: pro+ects are playing an increasingly important role- .he understanding of the specific management control activities of pro+ect-intensive companies: or multi-pro+ect organi8ations: are ho7ever limited- Some researchers have even gone argued (-

that the management procedures have to be re-conceptuali8ed from their roots in order to fit the multi-pro+ect organi8ations- #n this paper 7e build on classic contingency theories and recent findings in multi-pro+ect organi8ing in order to develop a conceptual frame7ork for analy8ing one layer of the management control in such environments- Fur frame7ork points specifically to the importance of pro+ect uncertainty and inter-pro+ect dependency in e5plaining the control strategies applied by 9<) companies- Fur study thus gives valuable insights into a research theme to 7hich earlier research has paid scant attention- #n much contingency 7ritings the importance of mutual ad+ustment is emphasi8ed- .he control logic is ho7ever underspecified and in order to handle the management control problematics illustrated in this paper: 7e pointed to a much broader variety of control strategies: including the role of routines: planning and input control- .he paper also demonstrates and e5plains the role of program management: a management control function that seems to be utili8ed in many contemporary multi-pro+ect organi8ations- #n this sense: the paper contributes to the understanding of the relationship bet7een pro+ect management and program management-

.he paper presented a typology identifying four different control settings- (e argued that the basic logic for management control in multi-pro+ect organi8ations: 7ould be the routine-based control- #n many multi-pro+ect organi8ations: ho7ever: due to uncertainty or dependency: additional control strategies are reEuired- #n the paper 7e offered three additional control strategies to complement the routine-based: 7hich 7as observed in all of the studied companies- .he second control strategy found in situations characteri8ed by a higher degree of dependency: 7e argued that a planning-based control strategy 7ould be most likely- Cere 7e stated that the observed interdependency bet7een the pro+ects 7ould be possible to handle 7ith increased planning efforts due to the limited uncertainty associated 7ith each of the pro+ects- (hen uncertainty 7as introduced: more sophisticated control strategies 7ere called

(.

for- #n situations characteri8ed by high uncertainty: but lo7 degree of dependency: it 7ould be possible to assume that a resource-based control strategy 7ould be suitable due to the limited need of coordinating bet7een pro+ects- #n the final cell: 7e argued: a more interactive control strategy seems appropriate due to the mutual handling of uncertainty and dependency- (e suggest to label this control strategy: program-based: to stress the additional layer of control freEuently observed in such situations-

Fur findings and the presented model are: of course: limited in several respects- 4uture studies: 7e 7ould argue: should try to further the discussion on various types of multi-pro+ect organi8ational settings in order to create possibilities for establishing a contingency perspective on control in such conte5ts- .he proposed frame7ork: 7e 7ould argue: might be utili8ed in future studies that take a broader approach to7ards the control strategies in 9<) and professional companies- Fur frame7ork especially illustrates the importance of not only studying management control on the pro+ect-centric level >cf- )avila: 2333A and company7ide aspects of pro+ect management systems >Simons: !??5*!!0A- Fur frame7ork thus contributes to the present understanding by illuminating the intersection bet7een the control of single pro+ects and the organi8ation of pro+ect management systems in 9<) companies-

(/

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)1

4ypical length of project 4ype of dependence #et6een projects +rganization al structure !tandardized project model 7ey traits of multi-project organization

Saab 4uture Products 5 years Limited

Ericsson ;SG !-2 years Mutual / seEuential

Ericsson S94 " years Mutual

.elia Mobile ! year Mutual

Matri5 Oes >PSMA Pro+ect manager reports to department head and program manager Management team considers the fundamental 7ay of control-ling pro+ects as HselectingI the right ones 9esource estimation is based on standardi8ed areas ;alanced score-card has been implemented PSM is implemented and used in most cases

Matri5 Oes >P9FPSA Systems department in charge of launching pro+ects .7o pro+ect offices are part of the organi8ation 'eographically dispersed units effect the control Fne steering committee 7ith several members Steering committee makes decisions on the pro+ectsM strategies: directives and changes Smaller pro+ects have increased in number in recent years

4unctional Oes >P9FPSA Strategic Product Management responsible for product range 9adio )evelopment ;oard: centrali8ed forum: making all ma+or decisions in pro+ects Each sub-unit has an operative steering committee Pro+ect management office at decentrali8ed level Fperative planning resides at the pro+ect management office Manager of pro+ect office responsible for each unitMs pro+ect portfolio Sub-pro+ects often geographically dispersed Cigh dependencies both 7ithin and outside the S94 unit

Purpose Oes >P9FPSA Si5teen pro+ect managers in a pro+ect management pool Pro+ect management office: one of several staff functions Each business unit has a steering committee B pro+ect coordinator is responsible for contacts bet7een pro+ects Many pro+ects of many different types Pro+ect 7eb used for control and follo7-up purposes Much 7ork has been put into the pro+ect selection process $BSB* a group for making priorities bet7een pro+ects Priority list divided into four categories Steering committee at business unit level Special coordination teams created 7hen inter-pro+ect dependence is high

Main logic of control Line manager dominates and assigns resources Program Manager coordinates bet7een pro+ects Steering committee Planning constants Gritical resources are not allocated Manager for pro+ect office >staff functionA

)%

4a#le %& " cross-case comparison

)$

Routine-#ased control Control setting Lo7 dependency bet7een pro+ectsLo7 pro+ect uncertaintyrimary control 9outines: pro+ect mechanism management models7ey function Pro+ect controllers

lanning-#ased control Cigh dependency bet7een pro+ectsLo7 pro+ect uncertaintyPlanning

rogram-#ased control Cigh dependency bet7een pro+ectsCigh pro+ect uncertaintyGontinuous dialogue: program managementPro+ect planners: Pro+ect managers Program pro+ect managers coordinators

Resource-#ased control Lo7 dependency bet7een pro+ectsCigh pro+ect uncertaintySelf-contained pro+ects: input control

4a#le $& !ummary of findings: four control strategies

)(

Lo7 Lo7 # )ependency bet7een pro+ects ## Cigh

Pro+ect uncertainty

Cigh

###

#J

5igure %& 5our control settings: dependency and uncertainty

Lo7

8ncertainty

Cigh

Lo7

###

Dependency Cigh ## )) #J

Lo7

Pro+ect uncertainty

Cigh

Lo7 )ependency bet7een pro+ects

Routine-#ased control

Resource-#ased control

Cigh

lanning-#ased control

rogram-#ased control

5igure $& Control strategies in multi-project organizations

),