European Management Journal Vol. 22, No. 1, pp.
63–73, 2004
Pergamon
doi:10.1016/j.emj.2003.11.017
Exploring Decision
Support and Strategic
Project Management in
the Oil and Gas Sector
BORIS ASRILHANT, Petrobras S.A.
MAUREEN MEADOWS, University of Warwick
ROBERT GRAHAM DYSON, University of Warwick
This article attempts to increase understanding of
best practice in decision-making in strategic project
management, as applied to the upstream oil and gas
sector. It describes what is meant by strategic pro-
ject management in that context, outlines the wide
range of techniques that can be applied to manag-
ing strategic projects, and explores the elements (or
dimensions) of the strategic project management
process, and the appropriateness of techniques in
facilitating strategic project management. It seeks
to improve managerial understanding of strategic
project management, by proposing a set of multidi-
sciplinary elements framed by the balanced score-
card’s (BSC) rationale, and investigating the extent
to which techniques address the proposed set of
elements.
 2004 Elsevier Ltd. All rights reserved.
Keywords: Strategic project management, Upstream
oil and gas sector, Balanced Scorecard
Introduction
It is widely accepted that the business environment
is changeable, uncertain and complex (Partington,
2000). Major changes have occurred as a result of the
growth of industrialised economies, the advent of
privatisation programmes and deregulation trends,
the reinforcement of shareholder power and the
development of new information technologies (Oyon
and Mooraj, 1999).
In this context, strategic projects are essential, novel
European Management Journal Vol. 22, No. 1, pp. 63–73, February 2004
 2004 Elsevier Ltd. All rights reserved.
Printed in Great Britain
0263-2373 $30.00
and long-term investments. They are required when
a firm wants to achieve, sustain and renew its long-
term objectives and prosperity. ‘Strategic projects are
the vehicles through which a sound vision gets
implemented and realised’ (Schoemaker, 1992). Stra-
tegic projects represent the core of corporate growth,
change and wealth creation. They are major invest-
ments, often involving high uncertainty, they com-
prise intangible benefits and promise attractive long-
term financial outcomes (Buckley, 1998). Strategic
projects also motivate the creation, acquisition and
development of competencies (Foss, 1997) and com-
prise a collection of diverse options (Amram and Kul-
atilaka, 1999).
Strategic project management consists of two main
stages: evaluation and control (Amram and Kulati-
laka, 1999). Evaluation involves framing (i.e. drawing
up a strategic project after its inception), planning
and valuing a strategic project; evaluation ends with
the authorisation of the project. Control comprises
the management, review and redesign of a strategic
project through to its completion. Strategic projects
are considered to be managed successfully if they are
successfully completed, are financially successful and
are successful for strategic (i.e. non-financial) reasons.
This article aims to move towards best practice con-
cerning decision-making in strategic project manage-
ment, as applied to the upstream oil and gas sector,
i.e. the research, exploration and production of crude
oil and natural gas. It will explore the concept of stra-
tegic project management, the elements (or dimen-
sions of the process) involved in the strategic project
63
DECISION SUPPORT AND STRATEGIC PROJECT MANAGEMENT
management process, and the role of techniques in
facilitating strategic project management.
In this article, elements are classified into three categ-
ories — context elements and content elements that
describe the strategic project management process,
and outputs that describe the results of the process.
Elements are placed within the four perspectives pro-
posed by the Balanced Scorecard (financial, external
environment, internal business, and learning and
innovation). In addition, techniques applied to man-
aging strategic projects are separated, for simplifi-
cation, into evaluation and control techniques.
This article begins with a description of the tech-
niques applied to managing strategic projects. The
research methodology for the study is then intro-
duced, before describing the results of the interviews
under a number of headings (defining strategy and
strategic projects; evaluating and controlling strategic
projects; elements for evaluation and control; and a
balanced set of elements). Techniques and elements
involved in strategic project management are then
matched. The last section presents the conclusions
and future research directions.
Techniques for Strategic Project
Management
There is a wide range of techniques available for
managing strategic projects. Prior to introducing
these techniques, the term ‘technique’ needs clarifi-
cation. Technique is a generic term, and involves
models and methods (Chapman, 1997). Techniques
are applied by decision-makers in managing an indi-
vidual project or a portfolio of projects to help them
‘deal with the complexities of the project process’
(Dawson, 2000). Under the organisational knowledge
framework, techniques are defined as individual,
explicit knowledge (Cook and Brown, 1999).
Here, techniques are divided into traditional and
recently-developed techniques. Traditional tech-
niques include accounting and financial measures
(return on investment, net income, payback period,
internal rate of return, net present value —NPV,
cost–benefit analysis, leveraged NPV and human
resource accounting), sensitivity analysis, techniques
that incorporate uncertainty (risk-adjusted NPV,
decision-tree analysis, risk analysis, forecasting, scen-
ario analysis, contingency analysis and simulation),
and techniques that deal with some degree of math-
ematical complexity (optimisation, capital and man-
power rationing, cost management, scheduling and
progress measurement). Managers are also being
exposed to recently-developed techniques to support
project management, including real options
(Bowman and Moskowitz, 1998) (sometimes inte-
grated with utility functions (Kasanen, 1994) and
64
game theory (Smit and Ankum, 1993)), economic
value added (Stewart, 1994), balanced scorecard —
BSC (Kaplan and Norton, 1992) and intellectual capi-
tal (Bontis et al., 1999). As the balanced scorecard will
be used as an analytical framework in later sections
of this paper, it will be introduced further at that
point.
On the one hand, the appropriateness of techniques
to address the elements involved in strategic project
management would seem to be limited (Mooraj et al.,
1999). Most elements involved in strategic project
management are multidisciplinary and not always
quantifiable (Becker, 1983). Techniques tend to focus
on aspects that are easily quantified.
On the other hand, as firms adopt recently-developed
techniques for managing their businesses, managers
are forced to develop a practical understanding of
each technique (Brewer et al., 1999). However, for a
number of reasons such techniques are often not
implemented. First, managers resist adopting new
procedures. Second, recently-developed techniques
are often complex (Slater et al., 1998). Third, there is
no scientific evidence of a positive cost–benefit analy-
sis arising from their application (Oyon and
Mooraj, 1999).
There is a gap between what managers want from
recently-developed techniques and what these tech-
niques are designed to offer (Amram and Kulatilaka,
1999). Managers recognise the limitations of quanti-
tative analysis, use techniques such as NPV as a mere
‘organisational ritual’ (Slater et al., 1998), and add
their judgement and intuition (Ward and Grundy,
1996).
As the gap widens, techniques are excluded, and
managers make subjective decisions (Amram and
Kulatilaka, 1999), sometimes as ‘an excuse for retreat
into untested intuition or ‘acts of faith’’ (Ward and
Grundy, 1996). As a result, managers tend to associ-
ate a project’s success with their superior ability and
a project’s failure with bad luck (McGrath, 1999).
Research Methodology
Strategic project management is a complex, value-
creating process to assure long-term corporate suc-
cess, and hence there is a need for techniques to act
as value creation facilitators. It is therefore important
to understand the strategic project management pro-
cess, define the elements involved in it, and identify
the role of techniques in facilitating such a process.
In order to explore these issues, nine semi-structured
face-to-face recorded interviews were carried out
with a diverse group of managers holding top and
medium positions in a single company in the
upstream oil and gas sector. The upstream oil and
European Management Journal Vol. 22, No. 1, pp. 63–73, February 2004
 DECISION SUPPORT AND STRATEGIC PROJECT MANAGEMENT
gas sector is a capital-intensive, technology-oriented
and infrastructure-based business. The sector has no
tradition of dealing directly with customers at the
very end of the productive chain. Geophysicists,
geologists and engineers manage the sector, which is
well versed in the concepts of strategic projects
involving a high level of uncertainty, strict environ-
mental legislation, prohibitive regulations and an
intense degree of competitiveness.
The company surveyed (name not disclosed for ethi-
cal reasons) is a big, integrated, international, plc oil
and gas company. In December 2002, the number of
employees was around 38,500 and the turnover was
circa 22.0 billion pounds. The reasons for inter-
viewing only a single company included (1) the
opportunity of free access; (2) time and cost con-
straints; and (3) the exploratory characteristics of
the investigation.
Interviews lasted for one hour, on average. The
group of interviewees comprised three executive
managers, a production general manager, an explo-
ration general manager, a reservoir general manager,
a production development manager, a new ventures
manager and a strategic planning manager. It is
already well understood that the world’s leading oil
companies undertake far-reaching strategic projects
in their ‘quest for efficiency in a turbulent environ-
ment’ (Cibin and Grant, 1996). It is therefore unsur-
prising that the interviews addressed a diverse range
of strategic projects, such as marginal field develop-
ment, giant field development, asset disposal, field
exploration, company acquisition/merger, infrastruc-
ture, market entry/re-entry, corporate information
system, technology research and development, asset
acquisition, organisational restructuring, and stra-
tegic alliances.
The interviews began by defining such concepts as
corporate strategies, strategic opportunities and stra-
tegic projects, as well as describing the process of
evaluating and controlling a strategic project. They
then moved on to identify, define and validate the
elements involved in evaluation and control, as dis-
cussed in the following sections.
Defining Strategy and Strategic Projects
The interviewees defined corporate strategy as a set
of actions (or a current way) to achieve previously
identified long-term corporate objectives. These
actions are responsible for corporate growth,
improvement and reforms. Interviewees identified
two different kinds of strategy: business strategy and
competitive strategy. The former refers to what a
company wishes to be in the future, i.e. a company’s
‘soul’. The latter refers to a company’s market pos-
itioning in a specific industry.
European Management Journal Vol. 22, No. 1, pp. 63–73, February 2004
A strategic opportunity was defined as anything a
company can take advantage of, in order to improve
its competitive position and achieve the best possible
corporate results. A strategic opportunity is essential
for a company to complete a trajectory within a spe-
cific scenario. A strategic opportunity is usually an
output of corporate visioning. It is sometimes a hid-
den option, and opens up a competitive differential
to the company. The corporate vision is responsible
for conceiving the corporate strategies and continu-
ously developing distinguishing strengths, such as
resources and capabilities, to acquire, maintain and
renew a competitive advantage before the competi-
tors.
A strategic project is considered to be an entity
involving a specific investment associated with a cor-
porate strategic area. It is also a means of putting a
strategic opportunity into practice. It is a conceptual
and physical description of the mechanisms to attain
a strategy. A strategic project must be applicable and
executable, i.e. a representation of reality, have a
business orientation and be in line with corporate
mission and goals. While conceiving a strategic pro-
ject, it is important to address important issues such
as the actions to be taken in order to develop critical
resources, to successfully consolidate a position and
to boost internal satisfaction.
Strategic projects are considered as few, relevant,
front-line, large-in-size, innovative, value-creating
and market-positioning projects. They are seen as
both external and internal agents, not only opening
up external channels, but also enlightening internal
strengths. They might have an impact on the com-
pany in the long run and also provide strong long
term results. However, they are often perceived to
be high-risk projects, because they often admit the
possibilities of negative financial results.
Evaluating and Controlling Strategic
Projects
The evaluation of strategic projects, the interviews
suggested, refers to their design, planning and valu-
ation in order to allow ultimately for their compari-
son and ranking. From a financial perspective, the
evaluation of a strategic project is a hard task. It is
difficult to associate strategic results with financial
results, although the former explains the latter. On
the one hand, interviewees with a strategic back-
ground felt that a strategic project might not neces-
sarily be financially oriented (although it is presumed
to be financially beneficial in the long run). For them,
financial results are important, although they are not
essential, because other results — indirect and not
easily (or even) measurable, are also important, such
as market position, customer satisfaction, internal
satisfaction, image, reputation, access, social and
65
DECISION SUPPORT AND STRATEGIC PROJECT MANAGEMENT
environmental impact. On the other hand, inter-
viewees with a financial background felt that finan-
cial results are fundamental, even if they are indirect.
During the interviews, an important question was
posed: is it possible to link strategic results to finan-
cial ones? Interviewees recommended building a
bridge among different perspectives, including the
financial one; this is discussed later via the Bal-
anced Scorecard.
Some interviewees felt that the process of evaluating
a strategic project starts by identifying a strategic
opportunity associated with a number of expected
results. A strategic opportunity motivates the concep-
tion of one or more strategic projects. If a company
has both the basic resources and capabilities (or is
able to obtain them within a reasonable time), and
also allocates its best resources to realise the planned
actions, it has the needed competencies to create,
acquire, maintain and renew a competitive advan-
tage. In order to acquire a strategic opportunity, a
company participates in auctions and bidding pro-
cesses, among others, and also establishes an effective
interaction within the company and between the
company and its peers. During the acquisition of a
strategic opportunity, the strategic project is the
instrument used to build a relationship based on
mutual faith, in order to exchange ideas, reinforce a
suitable image and prospect a profitable market pos-
itioning.
A strategic project can be controlled by checking
whether goals are attained, actions are performed as
planned, and results are successfully achieved. The
development of a certain number of actions allows a
company to achieve a strategic project’s expected
results successfully. The process of control usually
corrects eventual deviations from the desired values
during a project’s implementation. However, correc-
tive action might not be effective, as some changes
are irreversible.
Although a continuous, systematised re-evaluation of
a strategic project should have been carried out from
its inception, a company must have a proactive atti-
tude in order to transform its future. A reactive, tra-
ditional performance measurement system is not
unconditionally insufficient; a proactive approach is
also necessary to accomplish effective strategic pro-
ject control. Some interviewees added that a strategic
project’s diffusion within the organisation, effective
managerial involvement, changes in the organis-
ational routines and continuous training are also
requirements for effective control.
Control is usually associated with the process of sus-
taining and renewing an acquired strategic opport-
unity. During this process, a strategic project can be
stopped due to a lack of reliability and feasibility,
and adapted due to internal and/or external circum-
66
stances and replaced by more attractive strategic pro-
jects.
However, strategic projects are usually not effectively
controlled. Three main reasons were advanced for
this. First, control is in itself a difficult matter. Sec-
ondly, planning is usually not suitably performed
and directly affects a strategic project’s overall per-
formance. Finally, there is often an inadequate
regime of managerial compensation. Beyond this, a
strategic project must be accurately and continuously
controlled to guarantee successful outcomes. Time,
effort and resources are seen as the key variables in
controlling strategic projects. Effective control has the
power to dynamically execute, transform and adapt
a strategic project. If a company is sufficiently skilful
and organised to proactively seek new targets, then
it might be able to accomplish effective control.
Elements for Evaluation and Control
During the interviews, a range of elements (or dimen-
sions of the project process) involved in the evalu-
ation and control of strategic projects were identified
and defined. Many elements were suggested by inter-
viewees, but in order to generate an appropriate set
of elements it is advantageous to examine the level
of importance of each element so that non-pertinent
elements are excluded and the key ones are kept.
Elements were thoroughly examined in order to
assess the extent to which they should be included,
and whether any element should be combined, elim-
inated or restated, along with the examination of
potential interrelationships amongst them (Dyson
and Foster, 1983). The argument for reducing a num-
ber of elements to a necessary set of relevant
elements is extensively addressed in the scenario
analysis technique (Schnaars, 1998).
As a result, an aggregated list of the relevant
elements and their operational definitions emerged
from the interviews, based on a ranking of the most
important elements. Twenty-five relevant elements
involved in each of strategic project evaluation and
control were thus drawn from the interviews (50
elements in total). The evaluation elements include a
wide range of sources of uncertainty, corporate and
competency alignment, financial capability and lever-
age, and a diverse number of project impacts. The
control elements include a wide range of project scan-
ning and monitoring elements, customer and
employee satisfaction, employee and technological
development and a number of project targets.
A Balanced Set of Elements
The suggested elements emerged from the business
world, and the characteristics of the upstream oil and
European Management Journal Vol. 22, No. 1, pp. 63–73, February 2004
 DECISION SUPPORT AND STRATEGIC PROJECT MANAGEMENT
gas sector exerted some influence on the selection of
such elements. For this reason, it is necessary to
examine whether these elements are supported theor-
etically and the extent to which they are general and
comprehensive. A correspondence was therefore
sought between these elements and theory. The pro-
posed elements were researched in the literature to
ensure their completeness and credibility. It emerged
that the sets of evaluation and control elements pro-
posed by this investigation have a strong correspon-
dence with diverse, sound bodies of literature.
In order to investigate the extent to which the
elements are general and comprehensive, they were
placed within the four perspectives proposed by the
BSC (Kaplan and Norton, 1992) according to three
categories of elements (context elements and content
elements (Pettigrew, 1997) and outputs (Dyson and
O’Brien, 1998)), as suggested by the interviews and
detailed in the following paragraphs. The balanced
scorecard (BSC) is a technique for setting corporate
goals and measures in order to allow a firm to achi-
eve superior performance and long-term success. The
BSC looks at multiple, long-term measures in order
to eliminate the short-term bias and overcome the
reliance on solely financial measures. The BSC assists
managers in making the corporate vision clear to all
parties within the organisation, communicating and
aligning strategies with the corporate objectives,
planning the business, and learning (Kaplan and
Norton, 1992).
The BSC refers to a balanced set of multi-perspective
measures (or outputs), that drives a firm to superior
performance. In this study, the notion of ‘balance’ is
transferred from the BSC to a balanced set of
elements involved in strategic project management,
thus providing a ‘balanced framework’ for the stra-
tegic project management process. The proposed
elements were distributed through the four perspec-
tives (financial, external environment, internal busi-
ness, and learning and innovation) indicated by the
BSC. The rationale is that a balanced management
process is necessary to secure success across a bal-
anced range of performance measures. The concept
of balanced outputs suggested by the BSC was, there-
fore, not only associated with the outputs of strategic
project management, but was also carried over to the
process elements involved in strategic project man-
agement that drive the outputs.
Besides placing the proposed elements within the
perspectives proposed by the BSC, the elements were
also classified according to three categories: context
elements, content elements and outputs. Context and
content elements are part of the strategic project man-
agement process. In accordance with the 2000 PMI
Guide to the Project Management Body of Knowl-
edge, these elements are the influential elements that
affect the achievement of a strategic project’s outputs.
Outputs represent the ultimate results of a specific
process.
European Management Journal Vol. 22, No. 1, pp. 63–73, February 2004
Summarising the above discussion, the notion of ‘bal-
ance’ given by the BSC was used as a background
for creating a framework in order to assess the cover-
age of the proposed elements. The balanced sets of
elements involved in strategic project evaluation and
control are presented, respectively, in Tables 1 and 2.
At the evaluation stage, the elements span the finan-
cial, external and internal perspectives, but there is
little scope for learning and innovation. The content
elements are reasonably confined to the internal busi-
ness perspective. At the control stage, the content
elements transfer to the learning and innovation per-
spective, as any content development occurs as a
result of learning and innovation. Hence, the
elements span all four perspectives. The identified
elements thus appear to have a justifiable balance
across the process and its outputs.
Techniques and Elements: A Mapping
Having introduced a balanced set of elements
involved in strategic project management, this sec-
tion examines the extent to which techniques for
managing strategic projects address the proposed set
of multidimensional elements. For simplification,
techniques were separated into evaluation and con-
trol techniques, and then mapped onto the set of
elements involved in strategic project management.
This mapping is presented in Appendices 1 and 2,
and reveals the extent to which techniques address
strategic project management.
As shown in Appendices 1 and 2, the research find-
ings indicate that there is not a perfect match
between techniques and the proposed set of
elements. Techniques are not individually sufficient
to address all elements involved in managing stra-
tegic projects, and even a subset of techniques can
only give partial support to the process.
Although techniques are insufficient in themselves to
tackle all evaluation elements, a combination of some
of these techniques is able to tackle a great number
of elements. Summary measures, such as NPV and
IRR, address almost the same realm of elements. Tra-
ditional techniques that incorporate uncertainty, such
as scenario analysis, address another domain of
elements.
Techniques are also individually insufficient to tackle
control elements in their entirety. However, these
techniques extensively address the elements involved
in strategic project control. The complete set of tech-
niques listed includes some favouring a traditional,
prescriptive approach based on objective, quantifi-
able measures (such as capital rationing and financial
performance monitoring); it also includes some with
a prescriptive approach that has the additional fea-
ture of being descriptive (such as the balanced score-
67
DECISION SUPPORT AND STRATEGIC PROJECT MANAGEMENT

Table 1 Evaluation Elements through Different Perspectives and Categories

Financial External environment Internal business Learning and

innovation

Context Time Competition Corporate alignment

Financial capability
Financial leverage
Financial market uncertainty
Economic uncertainty Competency alignment
Social uncertainty Interdependency
Political uncertainty
Environmental uncertainty
Geological uncertainty
Technological uncertainty

Content Feasibility
Timescale
Durability
Flexibility

Output Cash flows Environmental impact Organisational impact

Financial summary measures Social impact
Political impact
Market share

Table 2 Control Elements through Different Perspectives and Categories

Financial External environment Internal business Learning and innovation

Context Financial market Market scanning Corporate alignment scanning Learning

Economic scanning
Scanning Environmental scanning Project milestones scanning Innovative routines
Budgetary constraints Political scanning Product monitoring Innovative technologies
Managerial interaction
Resources deployment

Content

Output Financial targets Customer satisfaction Corporate alignment Employee development

Timescale targets Environmental targets Employee satisfaction Techological development
Market position Organisational communication Organisational adaptability

card and intellectual capital). Traditional techniques,
which are usually adopted by organisations for con-
trolling projects, do not address most of the underly-
ing elements, and are therefore insufficient on their
own, as traditional measurement systems originate
from the accounting and financial domains, and
therefore favour a control bias (Kaplan and Norton,
1992).
Conclusions and Future Research
Directions
A wide array of techniques is available to support
the strategic project management process, ranging
from the traditional such as NPV and risk analysis, to
the contemporary such as real options and economic
value added. The strategic project management pro-
cess is a complex, value creating process aimed at
assuring long-term corporate success. Through a set
of interviews carried out with a diverse group of
managers in the upstream oil and gas sector, the stra-
tegic project management process is described. In
addition, 50 elements (or dimensions of the process)
are identified, and these are shown to be supported
by previous research and theory related to the stra-
tegic project management field.
According to the interviews, strategic projects are
considered to be crucial to capture a strategic opport-
unity, and have an impact on the company in the
long run. Strategic projects are perceived as high-risk
projects, and interviewees suggested bridging the
financial perspective with other perspectives. The
process of evaluating a strategic project includes the
allocation of a company’s best resources and capabili-
ties to realise the planned actions in order to create
and acquire a competitive advantage. The process of
controlling a strategic project aims to check whether
goals are attained, actions are performed as planned
and results are successfully achieved. However, a
reactive control is not sufficient. A company must
have a proactive attitude to transform its future
through managerial involvement, change in organis-
ational routines, and continuous training.

68 European Management Journal Vol. 22, No. 1, pp. 63–73, February 2004
 DECISION SUPPORT AND STRATEGIC PROJECT MANAGEMENT

Elements involved in strategic project management
are categorised by context, content and output. Ideas
from the balanced scorecard are transferred from per-
formance measurement, to test the balance of the
strategic project management process.
In the final section of the paper, techniques are
mapped onto the elements to describe the extent to
which techniques address these elements. It is shown
that there is not a one-to-one match between tech-
niques and elements, and individual or a small num-
ber of techniques can only lend partial support to the
strategic project management process. It can thus be
conjectured that the richness of the process demands
the deployment of a rich array of techniques. The
proposed set of techniques for managing strategic
projects include financially oriented techniques such
as NPV, process oriented ones such as scenario analy-
sis, prescriptive ones such as capital rationing and
financial performance monitoring, and descriptive
techniques such as the balanced scorecard.
The tentative conclusions outlined here raise further
questions around which techniques have proved
their worth in practice, and whether all the elements
are equally important within the strategic project
management process, or whether a subset of
elements can be identified as critical to successful
strategic project management. A further question
would be whether management recognise and focus
on the critical elements, and finally which techniques
can support the key elements and thus facilitate suc-
cessful strategic project management. These ques-
tions are the subject of further research.
Acknowledgements
The authors are grateful to the managers who anonymously
co-operated with the investigation undertaken.

Appendix 1

Connection of Evaluation Techniques with Evaluation Elements

Evaluation element

Evaluation technique Feasibility Timescale Durability Flexibility Time Financial Financial

capability leverage
Return on investment ✓ ✓
Net income ✓ ✓
Payback perioda ✓
Internal rate of return ✓ ✓ ✓
Net present value ✓ ✓ ✓
(NPV)
Leveraged NPV ✓ ✓ ✓ ✓
Risk-adjusted NPVb ✓ ✓ ✓
Sensitivity analysis ✓ ✓ ✓
Cost-benefit analysis ✓ ✓ ✓
Forecasting
Scenario analysis ✓ ✓
Contingency analysis ✓
Decision-tree analysis ✓ ✓ ✓
Simulation ✓
Risk analysis ✓ ✓ ✓
Optimisation ✓
Human resource ✓ ✓
accounting
Real options ✓ ✓ ✓
Game theory
Utility function
a
Non-discounted payback period
b
NPV discounted at a project’s risk-adjusted rate

European Management Journal Vol. 22, No. 1, pp. 63–73, February 2004 69
DECISION SUPPORT AND STRATEGIC PROJECT MANAGEMENT

Appendix 1 (Cont.) Connection of Evaluation Techniques with Evaluation Elements

Evaluation element

Financial Competition Economic Social Political

market uncertainty uncertainty uncertainty
uncertainty
Return on investment
Net income
Payback perioda
Internal rate of return
Net present value
(NPV)
Leveraged NPV
Risk-adjusted NPVb ✓
Sensitivity analysis
Cost-benefit analysis
Forecasting ✓ ✓ ✓ ✓
Scenario analysis ✓ ✓ ✓ ✓ ✓
Contingency analysis ✓ ✓ ✓ ✓ ✓
Decision-tree analysis ✓
Simulation
Risk analysis ✓ ✓ ✓
Optimisation
Human resource
accounting
Real options ✓ ✓
Game theory ✓
Utility function
Env. Geological Tech. Corporate Competency Inter-
uncertainty uncertainty uncertainty alignment alignment dependency
Return on investment
Net income
Payback perioda
Internal rate of return
Net present value
(NPV)
Leveraged NPV
Risk-adjusted NPVb
Sensitivity analysis
Cost–benefit analysis
Forecasting ✓
Scenario analysis ✓ ✓ ✓ ✓
Contingency analysis ✓ ✓ ✓ ✓
Decision-tree analysis ✓
Simulation ✓ ✓ ✓
Risk analysis ✓ ✓ ✓
Optimisation ✓
Human resource
accounting
Real options ✓ ✓ ✓
Game theory
Utility function
a
Non-discounted payback period
b
NPV discounted at a project’s risk adjusted rate

70 European Management Journal Vol. 22, No. 1, pp. 63–73, February 2004
 DECISION SUPPORT AND STRATEGIC PROJECT MANAGEMENT

Appendix 2
Connection of Control Techniques with Control Elements

Control element

Control technique Financial market Budgetary Market Economic Environmental

scanning constraints scanning scanning scanning
Capital rationing ✓
Manpower rationing
Scheduling ✓
Financial performance ✓
monitoring
Activity-based costing
Economic value added
Balanced scorecard
Intellectual capital
Political Corporate Project Product Managerial
scanning alignment milestones monitoring interaction
scanning scanning
Capital rationing ✓
Manpower rationing ✓
Scheduling ✓
Financial performance ✓
monitoring
Activity-based costing
Economic value added
Balanced scorecard ✓
Intellectual capital ✓

Resources Learning Innovative Innovative Financial Timescale targets

deployment technologies routines targets
Capital rationing
Manpower rationing
Scheduling ✓ ✓ ✓ ✓
Financial performance ✓ ✓
monitoring
Activity-based costing ✓
Economic value added ✓ ✓
Balanced scorecard ✓ ✓ ✓ ✓
Intellectual capital ✓ ✓ ✓ ✓
Customer Environmental Market Corporate Employee
satisfaction targets position alignment satisfaction
Capital rationing ✓
Manpower rationing ✓
Scheduling
Financial performance ✓
monitoring
Activity-based costing
Economic value added
Balanced scorecard ✓ ✓ ✓ ✓
Intellectual capital
Organisational Employee Technological Organisational
communication development development adaptability
Capital rationing
Manpower rationing
Scheduling
Financial performance
monitoring
Activity-based costing
Economic value added
Balanced scorecard ✓ ✓
Intellectual capital ✓ ✓ ✓

European Management Journal Vol. 22, No. 1, pp. 63–73, February 2004 71
DECISION SUPPORT AND STRATEGIC PROJECT MANAGEMENT
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European Management Journal Vol. 22, No. 1, pp. 63–73, February 2004
 DECISION SUPPORT AND STRATEGIC PROJECT MANAGEMENT

BORIS ASRILHANT, MAUREEN MEADOWS,

Petrobras S.A., Av Repub-
lica do Chile, 65 Sala 1702,
Rio de Janeiro, 20031-912,
Brazil. E-mail: asril@petrob-
ras.com.br
Boris Asrilhant is a Busi-
ness Consultant with
Petrobras – Petróleo Brasi-
leiro S.A. Currently co-ordi-
nating the Programme on
Excellence in Project Management in Petrobras’ Explo-
ration and Production Business Division.
University of Warwick
Business School, Coventry
CV4 7AL, UK. E-mail:
maureen.meadows@wbs.ac.uk
Maureen Meadows is Lec-
turer in the Operational
Research and Systems
Group at Warwick Business
School, with previous
experience in the financial
services sector. Her research includes visioning, market
segmentation and financial services.

ROBERT GRAHAM
DYSON, University of
Warwick Business School,
Coventry CV4 7AL, UK.
E-mail:
robert.dyson@wbs.ac.uk

Robert Dyson is Professor of

Operational Research at
Warwick Business School
and Pro-Vice-Chancellor of
the University of Warwick.
A past President of the Operational Research Society,
he has published widely in operational research, stra-
tegic planning and performance management.

European Management Journal Vol. 22, No. 1, pp. 63–73, February 2004 73