Beyond project management New perspectives on the temporary - permanent dilemma
Beyond Project Management ISBN 91-47-06403-X O 2002 The Authors and Liber AB
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To Rolf A Lundin from friends and colleagues
Table of contents
Preface
INTRODUCTION I
The Scandinavian School of Project Studies KERSTIN SAHLlN-ANDERSSON AND ANDERS SODERHOLM
Key features of the Scandinavian School of Project Studies 11 / A projectified society 14 / Project portfolios in their corporate context 18 / Relating the temporary and the permanent zo / Project management reconsidered 21 / Beyond project management 23
A PROJECTIFIED SOCIETY z How project management got carried away TOMAS BLOMQUIST AND ANDERS SODERHOLM
Projcct management as management knowledge 25 I Within industries, via engineering professionals, and abetted by industry-specific requirements 27 / Among industries through consultants: Expanding the scope and adding generic value 28 /Volume through professional associations: Picking up the latecomers with success stories and offers of professional identity j o / Long-term survival through standardization bodies, scientific research, and university training: Creating normative pressure 34 1 Carry on into the future 36
3 The temporary society and its enemies: Projects from an individual perspective JOHANN PACKENDORFF
The individual in the projccticised society 39 1 Project work from an individual perspective - a typology 41 / Project-hased work (type I) 44 1 Renewal project participation (type 11) 46 / Temporary work (type 111) 48 /Independent entrepreneurs (type IV) 51 /Project work forms and life in the projecticised society 53 / Who are the enemies of the temporary society? 57
4 Contracts of work in a project-based economy ESKIL EKSTEDT
Introduction 59 1Towards a project-hased economy 60 /Time aspects of organizations and employment 62 / From the permanent to the temporary 67 1 Market relations, transaction costs and contractual forms in different kinds of organizations 70 / Conclusions 77
TABLE O F CONTENTS
PROJECT PORTFOLIOS IN THEIR CORPORATE CONTEXT 5 Stickiness and leakiness in inter-organizational innovation projects
81
MARIA BENGTSSON AND JESSICA ERIKSSON
Introduction 8 1 / Inter-organizational innovation projects 83 / Flows in different contexts of innovation projects 84 / Four innovation projects and their contexts 88 / Contextual influence and flows in innovation projects 97 / Discussion 104
6
Information sharing among partnering project organizations
108
JEFFREY K. PINTO AND ZORICA NEDOVIC-BUDIC
Benefits of informamon sharing 109 / The potential for information sharing 111 I Challenges and dynamics of data sharing 112 / Conceptual framework 118 / Improving the prospects for data sharing among project organizations I r z
7 Projects and core values STEN J ONSSON
Introduction 126 / Observations of premium product design in context 128 1 The company history is the source of values 129 / With Gyllenhammar a new era began 130 I Empirical observation of value based product development14~/ Analysis 145 I The strong narrative solution 146
8 Intensive innovation context and design system dynamics
The case of car Information Communication Entertainment (ICE) systems
151
CHRISTOPHE MIDLER
Part one: The product trajectory: history and characterizat~on153 / Part two: The innovative firm odyssey 161
RELATING THE TEMPORARY AND THE PERMANENT 9 Organizing in two modes On the merging of the temporary and the permanent
170
BARBRO I. ANEI.1. AND TIMOTHY L. WILSON
Introduction 170 / A framework for discussion 172 / Observations 175 I Merging of the temporary and permanent 182 / Reflections 18s 10
Regenerated professionalism The librarian who went out on her own ELISABETN SUNDIN
Introduction 187 1 The Swedish public sector 189 1 Entrepreneurs and librarians 193 1 Why the librarian went out on her own 196 1Shifts in practice 197 / Shifts in theory 199
187
TABLE OF C O N T E N T S
11
Moving beyond the rhetoric of the post-modern corporation Some observations on complementarities in innovative forms of organizing TOMAS MULLERN
Introducing the theme of innovative forms of organizing 205 I Building the argument 207 I The Saab case 211 I The Cisco case214 I Concluding reflections 21 8 12
Bridging the gap between temporality and permanency HENRIK C.J. LINDEROTH
Action and the temporary organization 224 I Thc theory of the temporary organization 226 / Building networks and translating ideas into action 228 I The theory of the temporary organization meets actor network theory 234 1 Concluding remarks 240
PROJECT MANAGEMENT RECONSIDERED r j Project management as boundary work
Dilemmas of defining and delimiting KERSTIN SAHLIN-ANDERSSON
The attractiveness of projects: Controllability and adventure 241 I Boundary work 244 I Temporal, task, and institutional boundary work 245 I Project definition as boundary work 259
14 The futile dream of the perfect goal MATS ENGWALL
Project failures and unclear goals 261 1 The goal - the core of every project assignment 263 I The necessity of goal ambiguity 267 I The irrelevance of goals to project execution 271 I Project execution - a process of goal formation 275
r5 What goes on in projects?
O n goal-directed learning processes LARS LlNDKVlST AND JONAS SODERLUND
Introduction 278 I Scandinavian views on project processes 280 I Project organization 285 / Project organizing 285 I A process model 286 1 Conclusions 290
16 The life of a project researcher BARBARA CZARNIAWSKA
References Author presentations
205
Preface
Room for new thought styles In this anthology I find several important steps taken towards a new style of thinking about projects. The first is the challenge of projects as being completely planned activities. If we put the temporary activity called project in a context marked by uncertainty it is self-evident that in some way planning will not be complete. Those arguing for good project planning will try to make the planning as completely rational as possible. The other way around taken here is to look at what happened to the context when people started to have work and life organised in projects. Projectisation of society is a reality today. So is the organisation of work in corporations. We face a swarm of new issues and problems for research and studies in this new landscape generated by the ideas created in the first generation of project thinking and its applications. From an individual perspective it is a revolution of work and life so far-reaching that it "has reshaped the conditions for family life in contemporary society" (Johannn Packendorff). The combined individual effects are already noticeable in the Swedish society and economy. The second step I here can see leading to a new thought style (in the meaning of Ludwik Fleck) is the understanding of changing relations between corporations and customers in their joint project work developing more complicated and unique products. "Exit mechanisms dominating the market relations of traditional industrial organisations are exchanged for voice and sometime even loyalty in project based activities" (Eskil Ekstedt). The reader will certainly find other examples of steps taken here making room for a new, much more sophisticated, stylised thinking about projectified contexts.
Life as a project Maybe also life itself could be a project context. However, while reading Barbara Czarniwska's interview with Rolf Lundin "A Life of a Pro-
ject Researcher" in this book, a story came into my mind: A man was asked to explain the diversity of his experience in work and in private life. He answered, "There was no plan I just dived down and swam around". It sounded strange to his friends in the field of project practise. He almost regretted his spontaneous answer. Rolf's comment in his Post Scriptum could have been comforting for the man: "It also appears that too much of feelings and whims rather than planning took over my past life". With my background as a mathematical economist during a long period of my life I dare trying to formulate a general rule: Looking back on a person's trajectory of life you always end up falsifying the hypothesis that it could have been part of a project process. Along the same modelling line of thought I remember that smooth trajectories might in a more detailed resolution be of fractal character as in chaos theory. Changing perspectives means entering new worlds. Putting project studies and practises in contexts, that really matters, does also mean opening doors to new worlds of thought.
The project academy as context One new world of thought is the exploration of the contexts in which projects are in action. Getting in touch with reality beyond project management models is a necessity and a natural task for scholars in the field. The Swedish Project Academy, and its current chairman Rolf Lundin has formed such an arena for a growing host of practitioners in industry and consulting firms and of university scholars seeking to explore these broader issues. The aim of the academy is to enhance the interchange of ideas and thoughts between people from different spheres involved with project work. This mixture of professionals was also the starting point for a cluster of projects named Project Sweden, which sought to combine practical experience with scholarly analyses. It is too early to say anything about how successful this scheme can be. It depends certainly upon how deep the projects can deal with sensitive issues in the practical world. But the scheme has potential to generate more complex contextproject issues where the new perspectives presented in this volume can be put on trial. This book honouring Rolf Lundin is written in a spirit resembling
that of the Swedish Project Academy and of Project Sweden. By combining various experiences and professional perspectives, it opens up new venues for project studies and for project activities, and I hope it will rouse many to new project activities in new contexts.
Jan Odhnoff Professor Emeritus, Teleinformatics, Royal Institute of Technology, and founding chairman Swedish ProjectAcademy
The
Key features of the Scandinavian School of Project Studies New insights and understandings are often gained as experiences and lessons from various fields are combined and translated into new settings. This is certainly true for what we here term "The Scandinavian School of Project Studies". The Scandinavian School of Project Studies has developed an understanding of projects primarily by combining an organization theory perspective with theories on entrepreneurship and industrial development, and with in-depth empirical studies of how projects unfold in practice. This line of theorizing has grown from an interest in the rapid expansion of projects in a variety of settings. Projects abound in organizations, industries, and inter-organizational settings with long traditions of project work, as well as in arcas in which more bureaucratic and seemingly permanent and routinized organizations used to dominate (e.g. Lundin & Soderholm, 1995; Engwall, Steinthhrsson & Soderholm, 2002; Sahlin, 1996). Scholarly writings on project management have grown with the expanded use of projects - by organized efforts to perform defined tasks within a time-limited period and with some type of resource restrictions (e.g. financial, staff). It is not easy to prove that the use has expanded. Projects cannot be counted as easily as legal cor-
KERSTIN S A H L I N - A N D E R S S O N A N D ANDERS S O D E R H O L M
porations. But, several indicators show that this expansion has taken place, that it has spread among different industries, and is used for more varied purposes (see Ekstedt, Lundin, Soderholm & Wirdenius, 1999; Engwall, 1995; Chapter z in this volume). And the forming of projects in practice is influenced and inspired by widespread writings. Such reciprocal development of practice and theory is common in the field of management, for management theory has usually developed in close interaction with practice and with theoretical developments in other scientific fields (Engwall, 1992; Sahlin-Andersson & Engwall, 2002).
Many writings on project management have echoed practical management, and have taken the form of recipes and handbooks on "How to Manage Better". Such writings have provided valuable inputs to the discourse and development of new managerial tools. However, they appear to focus too narrowly on management of the individual project to be of value to people who are primarily interested in understanding how projects contribute to and are related to longer-term and wider developments in organizations, industries, and society. Furthermore, many of the handbook-type writings in project management assume ideal conditions for management and change that are seldom found in practice. Fuzzier and more ambiguous conditions often characterize life in organizations and society. The Scandinavian School of Project Studies has taken a wider, and at the same time closer approach in their studies (see e.g. Soderlund zooob; Engwall, Steinthbrsson & Soderholm 2002 for different research perspectives in this field; Packendorff, 1995). We point to three key features of the Scandinavian School. First, it has widened the scope of project studies beyond that of single projects. Its aim has been to reflect on and thereby contribute to the understanding of the way in which projects are contextually related. This broadened view has been triggered by questions such as: Why has the use of prolects expanded? How are projects formed from longer-term developments in organizations and society? How do they contribute to these long-term developments? How are projects that are pursued simultaneously or sequentially connected with or disconnected from each other? How can one best learn from one project to another?, and How can one avoid repeating unwanted procedures from one project to another? These studies, in other words, analyze the development of projects in relation to more general organizational and societal changes. With the
THE S C A N D I N A V I A N SCHOOL O F PROJECT STUDIES
elaborated analysis of the ways in which projects relate to their contexts, it has also become clear that the formation and management of individual projects are contextually dependent. Hence, even when focusing on individual projects, the relevance of understanding wider contextual contingencies is repeatedly demonstrated (Lundin & Soderholm, 7998).
This broadened analysis of projects, when compared to more traditional and "mainstream" writings in project management, is related to the second key feature of the Scandinavian School. As previously mentioned, studies of the Scandinavian School are theoretically based. The view pursued by the Scandinavian School on the relevance of context parallels developments in organization theory in which we have learned the importance of understanding organizations as open systems that are affected by their environments and by organizational fields. These project studies of the Scandinavian School have added to theoretical developments in the theoretical fields to which the analyses are related. The analyses have highlighted and added to the theoretical understanding of temporality, commitment, innovation, boundaries, and change more generally. Third, the Scandinavian School of Project Studies is empirically based. It is primarily based on close qualitative studies of how projects actually evolve, rather then on wishes for how they would evolve in the best of worlds. The in-depth studies have led to a strong awareness of the fact that projects vary. Variations follow from differences in tasks, but perhaps more importantly, from differences in context, history, and process. Even though projects are temporary organizations, they spring from historical processes and from the specific contextual circumstances in which they develop. An important topic for analysis, then, is the way in which projects are related to these contextual conditions. Obviously, in-depth empirical work also nurtures the theoretical development and further emphasizes the importance of project processes and the shortcomings of generic models for effective project management. Processes and activities are commonly more important for results than for formal structures. Moreover, it suggests that one must be cautious in formulating general normative how-to models for running a successful project. Rased on these key features, this book provides a multifaceted analysis of the emergence and management of projects under various conditions. We provide theoretical frameworks, analyses, and thorough empirical illustrations of projects in a wider theoretical and empirical
KERSTIN SAHLIN-ANDERSSON AND ANDERS S O D E R H O L M
sense. The chapters deal with different projects in different settings. Using a broad variation of project studies built upon the common ground presented above, we demonstrate and deepen the knowledge of the embeddedness of projects. In this way we go beyond project management to reconceptualize projects as they appear in their corporate and temporal context. We continue this introductory chapter by exploring the common ground of the various studies in greater depth. We begin with a reflection on the expansion of projects in society and we provide a few explanations for this recent trend. We then elaborate on two aspects of the contextuality of projects: the corporate context and the relationship between the temporary and the permanent. As mentioned above, this has been - and remains - an important theme in the Scandinavian School of Project Studies. And the discussion serves partly as an introduction to the following section, in which we use some findings from the Scandinavian School as an analytical tool to narrate the history of how the Scandinavian School was formed and how it has invited us to reconsider project management. Finally, the chapter summarizes a few lessons in practical project management that the Scandinavian School has provided. The label "Scandinavian School of Project Studies" does not exclude contributions from outside Scandinavia. The label merely reflects the origin of this research tradition in Scandinavia. If one should identify one person as its founder, that person would surely be Rolf A. Lundin - a Scandinavian. Professor Lundin published some influential early work in this area (see e.g. Lundin & Wirdenius 1989; Lundin, 1992; Ekstedt, Lundin & Wirdenius, 1992) and has continued to bring organizational analysis into the worlds of projects and temporary organizations (see, e.g., Lundin & Sijderholm, 1995; Ekstedt, Lundin, SGderholm & Wirdenius, 1999).
A projectified society Projects abound. There has recently been a great deal of talk about such concepts as project organizing, project management, project development, to such an extent that one can talk about project organizing as a management fad or fashion (see Abrahamson, 1996; Ravik, 1996; Chapter 2, this volume). Also, one can speak of the projectification of
T H E S C A N D I N A V I A N SCHOOL OF PROJECT STUDIES
society (Chapters 3 and 4, this volume; Bennis & Slater, 1968). If, however, we d o not focus so much on the labels that management practitioners and management theorists use, but on the practices of organizing activities, it is clear that projects are not new. One may argue, with Engwall, Steinth6rsson & Soderholm (zooz), that the most significant accounts of humankind can be regarded as projects. The reconstruction of Europe after World War I1 and the American Apollo program come immediately t o mind, and there are historical examples, including Columbus' explorations to West India and the building of the pyramids and the Chinese wall. When we label these undertakings as projects, the main features on which we focus - that define them as projects - are the temporal and task-oriented components of the exercises (even though, when accomplished, the tasks may turn out quite differently than planned). In each example we can envisage the task demanding a certain organization an organization that is no longer required and is ideally dismantled when the tasks are accomplished. The project is, in other words, a temporary organization (Lundin & Soderholm, 1995). It is not always the case, however, that a task forms the foundation of the project. A team may alternatively form the stability and coherence of the project and the task and the goals may change over time (Chapter 14, this volume). Projects, then, not only develop differently in different contexts, but the same procedure of events and activities may sometimes be defined as part of a project, sometimes not. It is not uncommon for projects t o be defined differently from time t o time and from situation t o situation. For example, a construction project usually involves various groups of experts such as architects, engineering consultants, real estate firms, construction companies, and politically appointed decision makers from several organizations. Sometimes this whole team and their activities and resources are described as the project, but each of the organizations involved also treats its team and the resources it allocates to this endeavor as a separate project. If we abandon the simple way of establishing what a project is, then the basis for defining and analyzing projects needs to be reconsidered. A project cannot be distinguished from other forms of organizing solely by one criterion, such as a certain technical content or a specific formal structure. Project organizing is a perspective that is developed relative t o certain activities, processes, and tasks. The expansion of projects, then, does not only constitute a new or expanded empirical phenom-
KERSTIN S A H L I N - A N D E R S S O N A N D ANDERS SODERHOLM
enon calling for studies and reflection. It is also an emergent perspective that is put on all sorts of aspects of a society that appears to be more projectified today than it was only 10 years ago (Ekstedt, Lundin, Soderholm & Wirdenius,rgqg). In part of the management literature, managers are told t o organize their company as a portfolio of projects, thereby bringing tasks and accomplishments to the fore (Arenius, Artto, Lahti, & Meklin, 2002). Such proselytizing has also been evident in public organizations and is closely associated with the loud call for rationalistic reforms in the public sector during the past few decades (see Leijon, Lundin & Persson, 1984; Brunsson & Olsen, 1990; Jacobsson, 1994; Blomquist & Packendorff, 1998b; Sahlin-Andersson & Soderholm, 1987). In the public sector, projects tend to be presented as means of breaking with stability and bureaucracy (Lundin & Soderholm, 1997; Chapter 10,this volume). Projects are thought to provide greater flexibility, and the flourishing of projects has followed hand-in-hand with an enhanced emphasis on flexibility. For private commercial corporations, projects, and the attractiveness of projects, have a stronger association with something planned, well defined, delimited, and controlled. When activities or organizational assignments are organized as projects, they appear to be easier to control, delimit, terminate, and follow up (Engwall, 1995; Berggren & Lindkvist, 2001; Sahlin-Andersson, 1989; Sahlin, 1996). Thus, the proliferation of projects harmonizes well with a striving for action, visibility, and evaluation. In addition, many projects seem to be created as ways for organizations to acquire extra resources. Particularly in times of frozen or downsized funds and supplies, an organization may redefine part of its daily operations as specific projects, in order to acquire project money from various sources. As is true for many management trends more generally (Sahlin-Andersson & Engwall, zooz), projects expand as integral or additional parts of other ideas, technologies, resources, and financial assistance programs (Chapters z and 12, this volume). As with many strategies, many projects are actually post-rationalizations. What turned out to be the outcome is tempting to explain in linear terms as having followed from a well designed plan and a delimited task. Projects then become a narrative genre (see Czarniawska, 1997) - a way of accounting for and making sense of what has happened or will happen. When viewing the mushrooming of projects in
THE SCANDINAVIAN SCHOOL O F PROJECT STUDIES
this light, we can assume that the development partly follows on an escalated demand for documentation in the world of organizations. In light of these features, it may seem tempting to organize and present not only enterprises, but one's whole life, as a project. The notion of life as a project encourages one to plan, to be task-focused, to fulfill means, and to be in control of one's own destiny. And many life stories now so popular in research tend to be based upon and to further this view. The reasoning seems to be that in order to understand the outcome - or where someone ended up - the entire project must be understood: when was the plan put to work, when was it designed, and so on. The interview with Professor Lundin in Chapter 16 shows, however, that even though he is a man of many projects, he cannot see his life as a project. It merely happened to him. He seized opportunities as they occurred, but not according to a predefined plan. And his understanding of organizations follows the same route. He convincingly shows - as do the authors of this volume - that neither personal life nor organizational life is best seen as one project with a predefined plan, but as a collection or series of more or less coupled projects. One project may lead to another, but more often different projects have different roots, and the challenge for many organizations - and many persons - is to find some order and relationship among them. Such relationships among projects is accomplished either by connecting projects with each other or by distancing and disconnecting them in order to maintain each project as a separate endeavor. When we speak of a projectified society, we point to the mushrooming of projects, both in the sense that activities are, to an increasing extent, organized as projects; and in the sense that many processes are presented and understood as projects. Both these aspects have consequences, for individuals, for organizations, and for society as a whole. Even though many projects were not aimed at changing labor relations and work conditions for individual workers, the effects on the labor market and on individuals can be dramatic, as shown in Chapters 3 and 4 of this volume.
KERSTIN SAHLIN-ANDERSSON AND ANDERS S O D E R H O L M
Project portfolios in their corporate context With the wider focus on projects that is portrayed above, and with insights used from organization theory, the theorizing of the Scandinavian School of Project Studies has been especially important in developing an understanding of projects as temporary and delimited organizational settings (Lundin & Soderholm, 1995; Lundin & Midler, 1998a; Ekstedt, Lundin, Soderholm & Wirdenius, 1999; Lundin & Hartman, zoooa). Placing projects in an organizational or corporate context indicates a willingness to acknowledge that projects are embedded in wider structures and processes. Projects are not isolated islands (Engwall, 2002) independent of outside events (Kreiner, 1995). And it is clear that the understanding of the manner in which a project may contribute to organizational or societal changes demands a thorough analysis of the ways in which projects stem from and relate to their context. Just as has been the case with organization studies more generally, this line of analysis calls not only for specifications of the project in focus, but also for more elaborated analyses of the context of projects and the aspects of these contexts that affect, and are affected by, the project (see Chapters 5 and 6, this volume). In part these contexts consist of other projects, and hence the interrelation between projects is one important aspect of the project-context relationship. Taking this cross-sectional perspective, we can analyze how projects that are carried out at the same time are related to and dependent on other projects (Sjogren Kallqvist, 2002). Projects may also be interrelated over time, and lessons from one project can be used in the next (see Chapters 7 and 8, this volume). One organization is usually conducting or is involved in several projects simultaneously. These projects may be interrelated - a situation implied by the term "project portfolio", which calls for informationsharing efforts among projects (more about this topic in Chapter 6, this volume). Even projects that seem to be separate and independent may compete for resources, attention, commitment, and legitimacy (SahlinAndersson, 1989; Eskerod, 1996; Sjijgren Kallqvist, 2002). Hence, the managing of the relationships among projects and with the wider context is one important aspect of project management. But it is an aspect that is often difficult to control, and it is not always the responsibility of appointed project managers. Many project management researchers have focused on the project manager. With such a focus, they have delim-
THE SCANDINAVIAN SCHOOL O F P R O I E C T STUDIES
ited their analysis to the perspective of the project manager. For this reason, the interrelationships of projects and their relationship with the wider corporate context, have been under-explored in the project management literature (Engwall, Steinth6rsson & Soderholm, 2002). The studies that form the bases for Chapters 5 to 8 in this volume do not focus primarily on the activities or responsibilities of the individual project manager, but take a broader view of the ways in which projects emerge. They demonstrate the development of relationships among projects and they analyze the effects of these interrelationships on the unfolding of the individual project. The embeddedness of projects in wider corporate contexts is multilayered and changing. It is not in the hands of individual project managers to control, and it may not always be desirable from the viewpoint of the individual mangers to integrate and co-ordinate projects too much. Our analyses of constellations of projects and of the embeddedness of projects in their corporate context points to other, often more difficult issues of management and governance than do studies that are restricted to individual projects. The fruitfulness of not restricting studies and analysis to individual projects and the importance of not taking formal structures as given are clearly shown throughout this volume. This demonstration of the gains of more contextualized designs of studies parallels findings in neighboring areas; for example, the development of more field-based analyses in organization theory (see Powell & DiMaggio, 1991; Scott, 1995; Scott et. al., 2000) and the development of more governance-based rather than government-based studies in political science (Rosenau & Czempiel, 1992). When analyzing the embeddedness of projects in their corporate context, it also becomes apparent that the management of these processes is neither simple nor clear-cut. The analysis points to dilemmas in the ways that projects should be related to their wider context. One such quandary can be termed the attachment-detachment dilemma. The basic concept of project organizing is usually to detach a certain task or a certain procedure from its wider context to allow specific procedures to develop (as discussed in Chapter 13, this volume). Project organization may also be a way to separate various parts, objectives, and relationships of the corporation. Thus, they may be used as a way to separate activities in order to handle potentially conflicting demands and objectives (c.f. Cyert & March, 1963). At the same time, concepts such as project portfolios show, as do Chapters 5 and 6 of this volume,
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the importance of co-ordinating projects and transferring and sharing information among them. This coordination not only involves the framework of a single organization; it is equally important to include partners, networks, competitors, or authorities as part of the analysis as discussed in Chapters 5 and 6.
Relating the temporary and the permanent Projects are the primary example of a temporary setting, whereas a traditional and hierarchical functional organization is the most obvious example of a permanent setting. Even though there are examples of projects, such as Apollo, that lasted far longer than some functional organizations (such as new IT start-ups), the preconception guiding the organizing efforts are different between the two. A project is supposed to end, and is therefore organized in terms of an effort that is running from "unfinished" to "finished". The functional organization is set up to maintain a flow of similar and repetitive activities for the foreseeable future. Based on this perspective, projects are believed to be more appropriate for change, flexibility, and action orientation than are functional organizations. Functional organizations, on the other hand, are supposed to guarantee stability, maintenance of core values, and long-term development. Obviously, relating the long-term ambitions of the functional organization and its advocates to the short-term action-orientation of projects and their supporters is a necessity in any modern organization. Relationships of this kind, however, include more than relating flexibility to stability. As shown in Chapter 9 of this volume, it seems that permanent and temporary organizations pick up some characteristics from each other (see also Kadefors, 1995). Projects become less focused on flexibility, as routines for running a project or standardizing project models become better known in a particular company. Diffusion of project management knowledge and normative pressure from professional associations further underlines the importance of routines and standard approaches in projects (as discussed in Chapter z, this volume). Thus, projects are less innovative and less flexible than some managers may believe. Actually, when projects have been used as a major organizing principle for some time, the main renewal problem may very well be the inertia embedded in the project organization (see Ekstedt, Lundin & Wirdenius, 1992).
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Likewise, the functional organization is subjected to changes. It becomes less focused on stability and maintenance of previous routines, as requirements for flexibility and change are more emphasized. The development of individual competence, the use of temporary employment, recurring changes of technology, and ways of increasing experiential learning are only a few cases that might result in greater flexibility and less stability in the functional organization. Relating the temporary and permanent setting is, therefore, more than a way of relating flexibility to stability. The relationship is far more subtle and multi-layered where tasks, organizing principles, time frames, management styles and overall corporate strategies influence the permanent as well as the temporary organization and the relationship between them. Chapters 11 and 12 of this volume elaborate on this concept using two case studies (Chapter 11) and in relation to actor-network theory (Chapter 12). Chapter q provides a general discussion on ways to relate temporary and permanent settings. The relationship between temporary and permanent settings is also interesting to analyze on an individual level. Based on the discussion in Chapter 3 , it is obvious that individuals can suffer as well as benefit from an extended use of projects in working life and personal life. In a professional context, individuals need to relate to both temporary and permanent settings, as they wander from project to project or from functional units to projects, for example. Being employed in a public organization with a bureaucratic tradition is often seen as not being the best foundation for an entrepreneurial effort. Nevertheless, Chapter 10provides a good example of how this can be achieved, thus highlighting one aspect of the temporary-permanent dilemma.
Project management reconsidered In the introduction, we pointed to three key features of the Scandinavian School: it has broadened the analysis of project management; it is theoretically based; and it is empirically based. These key features have eventually contributed to a reconsideration of project management. The reconsideration is not necessarily based on a view that the normative models dominating the literature on project management are wrong or unnecessary. Instead the Scandinavian School demonstrates that these models are incomplete if we are to understand how projects
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SAHI.IN-ANDHRSSON A N D
ANDERS SODERHOLM
reproduce, how projects relate to each other and to their broader context, and how individual projects evolve. The close focus on project progress and the contextualized character of projects point to great variation (see Hellgren & Stjernberg, 1995, for an empirical study illustrating this issue). Not all projects can be managed according to the same recipe. Both in practice and in the normatively oriented project management literature, we frequently find comments about projects that unfold in less ordered and less clear-cut ways than those assumed and prescribed in the handbooks. However, such examples tend to be regarded as exceptions to the assumed ideal models. The question is: "How often should we encounter an exception before accepting it as the normal state of affairs?" The comprehensive empirical studies that have been conducted within the Scandinavian School tradition find that the less ordered and less clear that projects are, the more frequent the perfectly clear and ordered projects are desired in many normative models and project textbooks (Larson, 2000; Blomberg, 1998). It seems reasonable, from such findings, to modify commonly spread project management models based on empirically observed conditions that deviate from the perfect situation presented in many textbooks. The insights gained through research of the Scandinavian School of Project Studies, invite us not to take the nature of a project for granted, but to continuously open the black boxes of projects and project management, as demonstrated in several chapters in this volume. Chapter 13 broadens the content of project definition processes beyond planning and active management actions, thus providing us with an enriched picture of the creation of projects. Project goals are discussed along similar lines in Chapter 14. Project goals are commonly assumed in the project management literature to be the result of a comprehensive planning process and to form the basis for the implementation of those plans. Chapter 14 reviews the validity of this conclusion and provides valuable insights into other aspects of the goal-formulating process in project contexts. From the project studies pursued by the Scandinavian School, we learn that in order to understand the outcome of a process, it is of value to learn about the process - a lesson inspired by empirical studies as much as by theories of decision-making processes (see e.g. March, 1981; 1994), social interaction, and social psychology (Weick, 1979).
THE SCANDINAVIAN SCHOOL OT: P R O J E ( : T S'rllDIES
Chapter 1 5 of this volume develops this notion further, as the authors provide an alternative approach to understanding "what goes on in projects" (see also Lindkvist, Soderlund & Tell, 1998). When we talk about this tradition of project studies as a school, we point to the three common features that form the basis of these studies. Moreover, a school indicates that the knowledge and perspective provided by the individual research projects have been enhanced through interactions with other researchers in the school. Even though we acknowledge Professor Lundin's impact on the formation of a Scandinavian School, we do not want to portray it as a formalized or goaldirected process. The Scandinavian School has not, in other words, been pursued as an ordered, delimited, and goal-directed project. As becomes clear from the interview with Rolf A. Lundin (Chapter 16, this volume) the Scandinavian School resulted from curiosity about projects and a willingness to learn about a phenomenon, rather than from a preconceived idea of what the lessons would look like in the end. Hence, the formation and development of The Scandinavian School of Project Studies in many ways resembles the features that students of this same school have found in their studies of projectified settings more generally.
Beyond project management The interview in Chapter 16 also demonstrates that knowledge development in this area has evolved in close contact with practitioners and with the researchers' own practical experiences. The role taken by Rolf A. Lundin and his colleagues has not been one of experts who seek to teach ready-made models to practitioners. Rather the knowledge has developed in an interactive dialogue among scholars and practitioners in various fields. An important drive for the researchers of this school can be summarized with a quote from Rolf A. Lundin: "I need new ideas, I need to get out to do some interviews". Many Swedish companies are project-based. It has also shown to be the case that organizational changes of the Swedish public sector have tended to be pursued as separate projects, rather than as all encompassing programmatic changes (see e.g. Olson & Sahlin-Andersson, 1998; Chapters 10 and 1 3 in this volume provide examples of such project driven transformation of the Swedish public sector). For these reasons it may not be so
K E R S T I N SAHLIN-ANDERSSON A N D ANDERS SODERHOLM
surprising that empirically oriented Swedish management researchers have been so active in developing knowledge on project management and beyond. However, it is also safe to claim that the attitude in Scandinavian companies is fairly open and that many companies handle a large number of projects and they are constantly seeking inspiration on ways to organize their efforts. In so doing, both company representatives and consultants are open to new approaches and to unorthodox advice. It is sometimes claimed that because the Scandinavian economies have a large number of companies that differ from the role models presented in project management textbooks, they are more likely to look and listen for approaches that go beyond project management. Because so many Scandinavian companies are project-based, and other types of organizations have pursued multiple projects, these organizations also search for knowledge that goes beyond management of the individual projects. The Scandinavian school offers one simple lesson: in order to utilize the complete potential of project organizing for enhancing control, flexibility, and change, more systematic attention must be paid to the ways in which projects develop relative to their corporate and temporal context. By reconsidering projects and project management, this volume offers reflections and concepts for such a context-dependent management of projects.
Project management as management knowledge Many fields of management theory and practice have grown strong over the past several decades. MBA programs have become standard around the world, management consultancy firms have spread globally, and the use of management models is a hot topic in magazines, business schools, and among practitioners. Concepts and recipes have spread via books, management gurus, and consultants into every corner of the corporate world (Sahlin-Andersson & Engwall, 2002). Acronyms such as TQM, BPR, and HRM are well known and widely used. For management theory to have grown, of course, requires managers, and management as a profession has grown considerably. Positions with a management function are to be found far down in the organizational structure and even assigned fairly narrow tasks. The increased supply and application of management models and knowledge and the growing number of increasingly similar managers in increasingly similar corporations (DiMaggio & Powell, 1983) are crucial to the creation of management as a global field of professional knowledge. This is also true of project management. A number of indicators show that this field is becoming increasingly established as a management field in its own right: professional associations exist; it is marketed as a core method for general and functional managers alike; the field is being standardized through specific examinations; and project management is slowly entering the core curricula of business and engineering schools.
TOMAS BLOMQUIST AND ANDERS SODERHOLM
This chapter analyzes the flow of project management knowledge between nations, industries, and tasks. We will explain how management knowledge has expanded in the particular field of project management, how it has been diffused, translated, and applied indiscriminately; in other words, how project management got carried away. One approach t o explaining current developments is to focus on either the various carriers of management knowledge (cf.the discussion in Sahlin-Andersson & Engwall, 2002: 16-ff.), such as accountants, consultants, or business schools (cf. E n p a l l & Zamagni, 1998; Wallerstedt, 2002; Ruef, zooz), or the vehicles, such as magazines, books, or MBA programs used for this knowledge diffusion (Furusten, 1999; Mazza, Sahlin-Andersson & Strangaard Pedersen, 1998). This chapter, however, aims to cultivate an understanding of how project management has been spread or has diffused. It is insufficient to focus simply on particular carriers (such as project management consultants) or vehicles (such as educational programs in project management). Consequently, we will explore the knowledge flow itself, analyzing the waves of diffusion, to find out why ideas connected with project management have met with such wide acceptance (Rclvik, 2002, Strang & Meyer, 1994). Knowledge flows can be viewed as either rational or instrumental bench-marking processes. More interestingly, however, is to discuss how such flows can be regarded as creators of institutional legitimacy, as ideas are translated and adopted in many different contexts (Abrahamson, 1991; Czarniawska and Sevon, 1996; DiMaggio & Powell, 1983; Suddaby & Greenwood, 1999). Focusing on either carriers or flows is not to view two mutually exclusive perspectives: flows comprise interaction among carriers, and carriers are needed to explain the flows. For example, as project rnanagement is diffused from the private to the public sector, consultants play a major role. Business schools contribute, as carriers, to the "legitimization" flow of project management models as schools appoint professors of project management. As pointed out by Czarniawska & Sevon (1996), management ideas do not necessarily flow easily or automatically. They need to be actively applied by organizations, and thus it is necessary for them to be translated or adapted for local conditions. Such flow is facilitated when interaction among organizations is frequent and intensive, thus providing many openings for the transformation of ideas. If institutional mechanisms, such as strong normative or mimetic pressure from govern-
HOW P R O J E C T MANAGEMENT GOT C A R R I E D AWAY
ment or professional associations, are present as well, the flow is further facilitated and accelerated (cf. Sahlin-Andersson & Engwall (zooz:z6-ff.). Also, if an idea is itself connected to the rational values currently prevalent in society, the flow is further assisted (Rmik, zooz; Meyer, 1996). In this chapter, we will briefly describe four processes, or flows, that have carried project management from being solely a U.S. government contract requirement for military deliveries, to becoming a concept applied even by elementary schools making efforts to change their organization. As will be shown, institutional pressure has evolved as professional organizations have grown stronger; ideas on effective, yet flexible, project management fit well with current ideas, and project management concepts have been adopted by many consultants as these ideas became increasingly popular. It seems as if the several components needed for successful knowledge flow have been put in place.
Within industries, via engineering professionals, and abetted by industry-specific requirements The evolution of project management tools began in weapon systems development in the U.S.A. in the latter part of the Second World War and in the following Cold War era (Morris, 1994, Engwall, 199~:90 ff.). Organizations that were important in this process were the U.S. Department of Defense (DoD)and NASA. They developed methods for processes such as network planning and control, and had their suppliers use these methods as well. Most important was the development of PERT - Program Evaluation and Review Technique - developed in 1957 to control and evaluate continuously the progress of large, complex development projects. Supported by U.S. DoD requirements, PERT became well-known among companies bidding for military orders. By 1964 almost 1,000 books and articles on PERT had been published, and the technique had become almost synonymous with project management (Morris 1qq4:g I ). Also, other countries' defense authorities picked up the method via engineers and military officers who had spent time in the U.S. PERT was used in the Viggen project in Sweden (a 1960s military aircraft project), since many of the engineers taking part had been trained in U.S. engineering schools or, in some cases, had participated in Pentagon training.
TOMAS BL0,MQUIST A N D ANDERS SODERHOLM
One of the first companies to use a similar method to control large projects was DuPont, with its Critical Path Method (CPM) method, applicable in the petrochemical industry in the U.S.A. This was in the late r q ~ o s and , a couple of years later over eighty industrial companies in the U.S.A. were using the same type of network planning tool to plan projects (Engwall, 1995). Reports from U.S. contractors and government agencies have indicated difficulties arising from PERT, even though project management enthusiasts in North America, Europe, and elsewhere have implemented such project planning techniques with commitment and energy (Morris 1994:79). Later on many large companies developed their own procedures for how to organize, control, and manage projects. Handbooks, routines, forms, in-house training, and similar efforts are examples of means by which such knowledge can be diffused throughout the company and to newcomers. Ericsson, the Swedish telecom company, has developed "PROPS." PROPS is said to be a generic method, and it is applied both to development projects and customer delivery projects. Project sponsors, project managers, and team members are all trained in PROPS, and the method has also been made available to other companies as well. PROPS has become a "product" that has been commercialized by Ericsson via their project management (PM) consultants. ABB, the electrical engineering company, offers ongoing education for project managers in its subsidiaries. This education is linked to a career path, since a certain number of courses is a requirement for becoming a senior project manager. Both Ericsson's PROPS and ABB's education programs represent powerful ways of consolidating PM within a company and maintaining a general project "language." Engineers leaving the company for positions in other companies of course become carriers of PM.
Among industries through consultants: Expanding the scope and adding generic value PM is today used in many different industries. Consultants have been major carriers of PM among industries, as there are many PM consultants. The growth of PM can be explained in three different ways. First, some of the engineers who were involved in various large military projects were later hired by other industries or, in some cases,
HOW PROJECT M A N A G E M E N T GOT C A R R I E D AWAY
started their own businesses as project management consultants. Engineers who had earlier worked on the Viggen jet fighter project at Saab in Linkoping (Sweden), for example, founded the Wenell Group. Today, Wenell Management is the largest independent PM consultancy firm in Scandinavia. Second, firms originally founded in other fields have expanded into PM as demand for such services has increased. Large firms such as Price & Waterhouse can be included in this category since they now offer services within PM. Third, firms active in specific knowledge areas have applied PM as a part of their existing services. This is true of many consultants - for example architects and technical consultants - who direct their services towards the construction sector. As PM consultants become established another pattern of diffusion emerges. Consultants need to attract customers and, furthermore, it is likely that they will try to make their areas of expertise as valuable as possible to customers. This has two consequences. First, when trying to attract customers they do not limit their market to the areas where PM started, i.e., military industries. Instead, they look around for other industries where the application of PM methods could make a difference. All manufacturing companies that have some interest in product development are obviously eligible. PM has thus spread, with the help of consultants, into new industries. This spread was also facilitated by the fact that customers have often learned of PM concepts during their professional training or in earlier positions in other companies. There is thus both a pull and push of PM into new industries. Second, consultants also try to apply PM to other issues than just complex product development. Companies delivering products or systems that are fairly standardized can thus organize their design-production-delivery processes as projects. As more projects are "discovered" this way in an endless number of companies in many industries, the scope of PM extends into new areas and industries. Consultants also need better-developed PM theoretical tools, so as to convince potential customers that PM is a well-founded way of organizing business. Consultants are thus interested in making PM more conceptual, to help them point out the general benefits of PM. PM models have become more generic and the value of PM has become more clearly identified. In this way, consultants have added value by making industry-specific models generic and generally attractive to
TOMAS BLOMQIJIST AND A N D E R S S ~ D E R I T O 1 . M
companies wanting to increase effectiveness and efficiency. PERT, CPM, and E N (Earned Value) are examples of specific PM models made generic.
Volume through professional associations: Picking up the latecomers with success stories and offers of professional identity The ascension of PM as a management device in the 1960s gave a lot of people of varied backgrounds - mainly engineers - a common interest. These PM specialists needed an arena for cooperation and mutual self-recognition, so the Project Management Institute (PMI) was founded in the U.S. in 1969, and Internet was founded in Europe 1965. Since the term "Internet" eventually became associated with other areas than PM, the association changed its name to the International Project Management Association (IPMA) in 1994. The Swedish association, Foreningen Natplan ("Network Planning Association"), changed its name to SvensktProjekt Forum ("Swedish Project Forum") in 1968, and is now a member association of IPMA. Both PMI and IPMA are membership based. PMI members can join and create local chapters that form PMI's local networks. IPMA consists of a number of national associations in which both individuals and corporations can hold memberships. IPMA is in this sense less centralized than PMI. Building local networks is a major concern of both PMI and IPMA. In 1999, PMI had over r4o chapters in over 45 countries, while IPMA had national associations in 29 countries. In 1989, PMI had 5,000 members; this number increased to 17,000 in 1995, 32,000 in 1998, 45,000 in 1999, and IOO,OOO in 2002. IPMA membership has also increased, reaching 20,000 members by 2002. One reason for this growth has been the desire to accredit project managers professionally, making them part of a "project profession". Consequently, both PMI and IPMA run professional certification programs for project managers. PMI issues the title "Project Management Professional" (PMP) to those who pass their exams. A PMP also receives special recognition at their annual congresses. The congresses of PMI and IPMA are important events for the organizations. PMI's world congress is held annually, while IPMA's confer-
H O W PROJECT MANAGEMENT C O T CARRIED AWAY
ence is held every second year. Between world congresses, both organizations hold national conferences and smaller, focused conferences and workshops. Nordnet is, for example, the name of an annual conference organized by Nordic project management associations. In these conferences, practitioners, consultants, and scholars meet to share success stories and practical know-how. The conference themes indicate a shift from engineering-oriented planning to more general management issues. One difference between PMI and IPMA is that PMI conferences over the last ten years have largely focused on internal project management topics. A number of the themes of PMI and IPMA conferences are presented in the tables below.
Table 2:1 Themes and locations of PMI conferences, 1983-ZOOZ.
TOMAS BLOMQUIST AND ANDERS SODERHOLM
Table
2:2
Themes and locations of IPMA conferences, 1967-2000 (see Eriks-
son, 1997).
Eriksson (1qq7:29) identifies three distinct periods in PMT and IPMA conferences. In the first, 1967-1972, the focus was on network planning and the cases examined were drawn from the defense and construction industries. A great deal of attention was paid to finding optimal solutions for planning schedules, costs, and resource use. Planning was still an important issue in the second period, 1979-1982, but some of the participants had started to question the possibility of finding the one-and-only, perfect planning method. Other issues, such as teams, culture, leadership, and project life cycle, began to achieve more prominence. At the PMI conference in 1980 ("Communication in Project Management"), several presented case studies highlighted projects as a means of organizing "normaln work and daily activities. In the third period, 1992-1996, it became more common to discuss the basic conditions for project organization and projects as part of company structure. "Management by Projects," the IPMA conference held in Vienna in 1990, is one example of this. Risk, context, and leadership are other issues given specific consideration during this period.
H O W P R O J E C T M A N A G E M E N T G O T C A R R I E D AWAY
A fourth period can possibly be identified at the turn of the millennium. Since 1997, the two associations have been making even greater efforts to increase the scope of PM, and more industries (such as public-sector organizations) and more tasks (including non-engineering tasks) have been included in PM generics. The PMI conference in 1999 and the IPMA conference in 2000 illustrate this tendency. The official PMI 1999 registration brochure reads as follows (p. 2 ) : "Learning, Knowledge and Wisdom... the Evolution of an Idea". In 1969, PMI was founded by a few visionary individuals who shared a belief that project management skills would increasingly be needed for success in the global marketplace. PMI and its members have taken their learning experiences over the last three decades and built a foundation of knowledge for the profession. As the Institute celebrates its thirtieth anniversary, the vision of its founders has never been more evident than in the 160% attendance growth rate at PMI Annual Seminars & Symposium over the last five years. Today, PMI is the most recognized source of project management professional wisdom in the world...and its Annual Seminars & Symposium has become the premier project management event of the year!" The PMI 1999 conference was organized around twenty-two topics, ranging from aerospace and defense, to women in project management. In the first announcement and call for papers for IPMA zoo0 in London, the general theme for the conference was declared to be "Universal Project Management from engineering through business and be yond.. .." Five streams were announced: "Management across the organization: All levels - from project manager through chairman and beyond.. ." 2) "New frontiers for project management. All organizations - from industry through commerce and beyond.. . " 3 ) "Meeting the challenges of diversity and change. All nations - from developing countries through developed and beyond ..." 4) "Case studies. All projects - from Polaris through YzK and beyond ..." 5 ) "Facing the new millennium with new skills. The professions - from process through competence and beyond.. ." T)
TOMAS BLOMQUIST A N D ANDERS SC)DERHOLM
The organizers were possibly attempting to make PM into an allembracing approach that should engage every employee in every organization in the world, and that should apply to all imaginable efforts. Finally, it should also be mentioned that both PMI and IPMA publish lournals and books. The publications made available through PMI and IPMA range from academic writings to handbook-type material.
Long-term survival through standardization bodies, scientific research, and university training: Creating normative pressure A fourth process and a fourth set of carriers comprise organizational bodies that claim to act on behalf of many in their efforts to make PM knowledge available and more substantial. Universities, colleges, and other educational institutions have incorporated PM into parts of their curricula over the past few decades. In Sweden, PM was first introduced at the two major schools of technology: the Royal Institute of Technology in Stockholm, and Chalmers School of Technology in Gothenburg. The Royal Institute of Technology appointed Sweden's first professor of PM in the early 1980s. By 1999, a large number of Swedish universities, university colleges, and engineering schools were offering courses in PM - from LuleP in the north to Lund in the south. Several of the schools and universities offer PM courses in several departments (e.g., the Royal Institute of Technology offers PM courses in four departments). PM courses are in most cases short - typically a five-week course is offered as an option to final-year students - and are not integrated into traditional programs of study, and no degree programs with a major in PM are offered to undergraduates. Two schools, Linkoping University, and Chalmers School of Technology in Gothenburg, offer professional, masters degrees in PM to students with several years work experience after their bachelors degrees. Even though more PM courses are offered today than a decade ago, still only a few business or engineering graduates have received any PM education. This opens up the market for consultants who organize training courses and in-house education in multi-national corporations. ABB, for example, offers an "academy" that provides employees
H O W PROJECT M A N A G E M E N T COT CARRIED AWAY
with a three-step training program in PM, organized in cooperation with U.S. partners. Research efforts have increased, and a number of PM-related dissertations have been presented in Sweden over the past decade, mostly at Chalmers School of Technology, Linkoping University, the Royal Institute of Technology, and Umed School of Business and Economics. These dissertations mainly cite research with a basis in organizational theory and management, and they tend to be descriptive and analytical rather than normative. Research programs involving researchers ranging from Ph.D. students to professors have been launched in schools in UmeH and Linkiiping, among others, and national and Nordic Ph.D. program courses arc also being offered. The situation is similar in Norway and Finland: Norwegian schools involved in PM include NTNU in Trondheim and BI in Oslo; in Finland, Abo University and Helsinki School of Technology have more formal research programs. For the long-term survival of a field of study it is important that it he represented at universities. When a field is granted its own chairs or dcpartments, it is also natural that research efforts will be organized on a long-term basis and that courses will be developed and offered to students at both the undergraduate and graduate levels. So far this has not happened in Sweden, but there are substantial activities going on that might result in a more formalized status for PM in the near future. Also ensuring the long-term survival of the field are the standardization bodies. When PM creates its own standards and rules of conduct it will also acquire a more established identity among other professions, which each have their own rules, hierarchies, and professional gatherings. PMI (see earlier section) publishes the Project Management Body of Knowledge (PMBOK) and also organizes PMP testing. PMP (Project Management Professional) is the title given to those passing the tests based on PMBOK. The first PMBOK was published in 1987; a second edition was published in 1996 and a third in 2002. Considerable effort has been devoted to consolidating PMBOK, and in the PMI 1997 conference, 24 of the 200 papers dealt with the latest thinking on PMBOK. PMI's Swedish chapter translated PMBOK into Swedish in 1998, and arranges PMP testing in Sweden. Similar routines have been established in other countries, thus spreading PMI standards as the de facto standard in the field. Last year the Swedish association SvensktProjekt Forum emphasized TPMA's project management certification. Compared to the PMI certification program, IPMA's is the more ambitious one.
Certification and standardization also evolve from organizations outside the large project management associations. Other organizations want to influence project management and how practitioners carry out projects. One such organization is the International Organization for Standardization (ISO), that over the last five years has developed I S 0 I 5 I 8 X:ZOOI - Project management guidelines for terminology standardization, I S 0 1ooo6:1997 - Quality management: guidelines to quality in project management, and ISO/IEC TR 16326:1999 Software engineering: guide for the application of ISOAEC 12207 to project management. In this process of developing engineering standards for measuring and assessing organizations' project maturity, one of the first project management models is the capability maturity model of the Software Engineering Institute. Similar models have become popular even among organizations outside the field of engineering and software engineering. The Project Management Institute has for the last couple of years also looked with greater interest into this type of project management model, as a means for describing and assessing organizations as t o how they are managing projects. It is obvious that the process of standardization is well under way. So far, not many companies require employees acting as project managers to be certified by IPMA, PMI, or any other certification organizations, and contractors do not require this of their partners (at least not in Sweden). Standardization thus has yet to be transformed into formal rules and requirements. But some consultants do, however, offer courses that enable participants to become certified according t o PMBOK, which is known and established as a general framework for PM. Lately, certain Swedish consulting firms have begun providing courses and assessment for the IPMA certification. This is a first step towards standardization, and a manifestation of normative pressure for P M knowledge to be of a recognized type.
Carry on into the future This chapter has discussed four processes or flows that have contributed to the spread of P M knowledge. Each process has its own organizational bodies that are the actual carriers of the knowledge. Even though it can be difficult to differentiate them, each process has specific characteristics that are outlined below.
H O W P R O J E C T MANAGEMENT G O T C A R R I E D AWAY
FLOWS
CARRIERS
SOME MODES OF CARRYING
1. Within industries
Industrial companies Engineering professionals making careers
Specific training Experience Formal requirements
2 . Expanding scope
Consultants
Concepts Generic models
3. Increasing volume
PMI and local cha ters IPMA and nationor associations
Conferences Publications (books and iournals) Professional identity
4. Long-term survival
Universities Standardization bodies
Courses Research Standards
Table 2:3 Flows, carriers, and modes o f carrying.
PM has spread from local and specialized contexts in the defense industry, to global and generic contexts through the processes discussed in this chapter. Of course, this spread has also changed the actual content or structure of the knowledge carried. PM was initially concerned with network planning, but as it spread some elements were added while others were dropped. As mentioned earlier, PM is now more of a management ideology than a tool. The four flows are interrelated and interdependent and they also illustrate layers of the institutionalization of society, all with functions in the flow of knowledge from projects to industries, from consultants to other industries, from practitioners to academia, from project manager to certified project manger and from practice to standards. Legitimacy
+
Standardization
+
Project Control
Success
t Figure
ProFessionalization
2:1
+ Volume 1 +Commercialization
Flows of project management knowledge.
TOMAS BLOMQUIST AND ANDEKS S C i O E K H O L M
These flows also represent the diffusion of project management knowledge from application in individual, large projects to application in multi-project environments in large and small organizations. The diffusion and use of project management are today regarded as a standard set of solutions to managerial problems. To illustrate the institutionalization of project management as a field of knowledge and the various roles project management carriers play in this process, the figure above shows how these flows of project management knowledge are carried by particular mechanisms. The first process or flow, which took place within individual industries, was originally initiated t o spread core project management methods, such as PERT and CPM, for the purpose of gaining better control over projects. The knowledge carriers supported large projects that demanded specific methods for controlling projects. Second, the successes stories told by project mangers and consultants expanded the scope of PM and commercialized the concept. Third, with a larger scope, the number of organizations and people coming into CO~tactwith project management concepts expanded, increasing the volume of affected projects and project managers. The development of project management associations gave project managers an identity, and encouraged them to certify and professionalize themselves as a new social group. The fourth and final process is the pursuit of longterm survival, which depends on project managers having common values pertaining to the content of projects and project management. Contributing to this survival arc standardization bodies, academic research, scientific journals, and university degree programs, all of which give the field legitimacy. Project managers and organizations can, through standardized certification programs and certified project management procedures, demonstrate that they are members of the project management community and are organized in an up-to-date way. Ultimately, all this aims at making new projects easier to control, more likely to achieve their project goals, and in the end become success stories. It is important to note that the four processes identified d o not take place singly, in sequence; rather they are overlapping and more or less parallel. This is to say that industrial companies, consultants, engineering professionals, professional associations, universities, and others are all involved simultaneously in the diffusion of PM; what we have attempted to delineate in this chapter are the differences among these carriers and flows. We can also see that the notion that "projects" are only large-scale endeavors managed by project managers has changed; now, nearly anyone can call himself a project manager, and the smallest of tasks can be called a project.
The individual in the projecticised society Since the middle of the 196o's, it has been repeatedly claimed that our society - and thus also our lives - is becoming increasingly projecticized, i.e. organized in terms of time-limited sequences of action and interaction (Miles, 1964; Bennis & Slater, 1968). This development was expected to imply an increased use of the project work form, but also an increasing tendency to view ongoing processes as limited in time and scope. When discussing reasons for this development, authors usually referred to a general increase in the speed of change in society in combination with an increased complexity. For organizations, the solution t o a reality in which most relevant factors changed and interacted at the same time was t o organize the flow of events into discrete projects, limited in time and space. As a trend in the development of work organization, projectization is usually expected t o imply increased task focus, better conditions for learning, renewal and flexibility, less bureaucratic forms for management control etc. (cf Ekstedt et al, 1999; Bcrggren & Lindkvist, 2001). In complex settings, a project-based leadership strategy is often said t o be preferable over classic, all-encompassing ones (Lundin, 1990). Even though there are some dangers of projectization - such as short-term
J O H A N N PACKENDORFF
thinking strategies and increased de-coupling of organizations (Blomquist & Packendorff, 1998a) - this trend is mainly perceived as a positive one for contemporary organizations. The basic reason for this perception seems to be that the project - viewed as a task specific and time-limited form of working - is perceived as a way of avoiding all the classic problems of bureaucracy, inertia and rigidity with which most "normal" organizations are struggling (Pinto, 1996). In that sense, project-based work is a part of the wave of 'new organizational forms' that has entered most industries during recent decades (cf Kerfoot & Knights, ~ 9 9 8 ) . In many industries and companies, the project is now the normal work form. This is obvious in cultural life, advertising, consulting, R&D, IT etc., but also in several large corporations which execute numerous projects both externally and internally. Given this trend, one might assess that work life for many people is becoming increasingly "projecticized", i.e. that substantial parts of individuals' work lives are spent in projects and similar temporary forms of organizing. This is especially evident where individuals working in project-based firms are concerned, i.e. firms where almost all operations take place in projects and where the permanent structure fills the function of administrative support. What hamper this development are the taken-for-granted views of industrial organizations as dependent on routines, hierarchies and technologies rather than flexibility, teamwork and customer orientation (Ekstedt et al, 1999). Still, just a small portion of contemporary organizations actually organize work with both decentralization and organized knowledge development in mind (Karlsson & Eriksson, 2000). Many of the calls for new organizational forms and a strengthened civil society can be analyzed in a similar manner - if people are liberated from their structural chains, they can create wonders together (cf Kiddel; 1981; Grantham, 2000). Most research on individual work satisfaction and commitment also support these claims (Karlsson & Eriksson, zooo). The silent proponents of traditional industrial organizing should thus he the enemies of the temporary society, failing to see the necessities of projectization at all levels of society and business. Or are they? Let us ask the alleged victims of the old industrial society and the intended beneficiaries of the new projecticised one - the individuals. Is it really so that projectization has implied better working conditions, increased possibilities for personal development, and more freedom in
T H E TEMPORARY SOCIETY AND ITS ENEMIES
choosing individual lifestyles? Is the projecticised society the solution to the problems that inhabitants of the bureaucratic society experienced? The chapter starts out with a discussion of what project work means - as compared to "traditional" work forms -, and a classification of different 'project workers' is presented. In the next sections, we meet different individuals from these different 'classes', and some important consequences of project work are discussed through their narratives. Then, we turn to the question of how project work affects life in general, more specifically what kinds of life forms are constructed by project working individuals, again through the narratives of the individuals. The paper ends by a discussion on what kind of society that people working and living by projects construct together - could it be so that the enemies of the temporary society are the same people that created it...?
Project work from an individual perspective - a typology From the perspective of the individual, the development toward projectization has implied important consequences for work and life. More and more people spend their working days in different kinds of project organizations, and even more people are involved in projects as a part of their otherwise routine-based employment. Besides being organized into all kinds of projects during work hours, there is also a tendency to perceive processes at work and in life in general in terms of projects (Kunda, 1992; Blomquist & Packendorff, 1998a; Lindgren et al. 2001). While there are theoretical expectations of different kinds in the literature, there are actually few empirical studies carried out on how individuals handle a projecticised reality. The project has usually been viewed as a planning task, and large parts of the project management literature are in fact just as de-personalized as organization theory once was. And if individuals have indeed been studied, they have exclusively been project managers, a category that is actually just a small portion of the total population of project workers. Moreover, this line of research rests upon quite a weak empirical base; while there is a lot written about how project managers should behave, there are very few descriptions of their actual behavior (Perlow, 1997; Lindgren & Packendorff, 2001; Rapp Ricciardi, 2001). Given this position, the aim of the paper is to critically analyze how individuals construct projects
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- both projects that they are organized into and projects that they construct themselves in their everyday life. In this analysis, examples of individual narratives on projects and projectization will be included, individuals working in the IT sector, in the cultural sector, as entrepreneurs, as consultants, and even as voluntary community workers. The problem of this kind of general reasoning is that there are many different types of projects. Project work is actually not just one homogenous work form; it means different things depending on the situation in which it is performed. The necessity of identifying different types of projects has also been widely acknowledged in literature during the past decade (cf Turner & Cochrane, 1993; Packendorff, 1995; Ekstedt et al, 7999). In the same way as there are many different types of projects, there are thus also many types of project work situations, ranging from 'perfect projects' where the individual works full-time for one single project and can devote all of her time to that, to all sorts of 'imperfect' project work situations where life is more complicated. We will therefore look more closely into different sorts of project work situations from two different dimensions, dimensions that have been important in understanding the narratives of the individuals interviewed: I
. To what degree the individual's work situation is tied t o the tem-
2.
porary project or the permanent organizational context To what degree project work is routine or exception to the individual
The question of whether the individual actually represents a project or an organization in her work is not always that easy to answer, but individuals often tend to make such narrative separations (Lindgren & Packendorff, 2001).If you are employed in a firm and work by projects, you are of course primarily to be regarded as an employee. From time t o time, you will also act as primarily being a project member. Like the project manager, who always has to represent her project in relation to colleagues, other projects and stakeholders, project team members must also quite often view themselves primarily as project members. Often, there is a matrix problem behind this - i.e. that the individual serves two masters and has dual loyalties. A second dimension of importance in this discussion is whether project work is routine or exception t o the individual. Projects have always
T H E TEMPORARY SOCIETY AND ITS E N E M I E S
been described as unique once-in-a-lifetime-events, far away from everyday repetitive boredom. Consequently, project work has also been seen as something unique and exciting, where the individual will perform new and different tasks in the pursuit of ambitious and innovative goals. The project thus becomes a kind of temporary system, in which you can work unusually hard, have unusually fun, being unusually creative. Against this, one might depict a modern reality in which projects are not only repetitive, but also the work form around which the entire operations of firms are built. As mentioned above, the project-based firm is an increasingly common phenomenon, and many individuals spend their entire working days on different projects. This does not mean that all projects are identical, but that they are executed using standardized procedures - every product is still unique, but the process of 'assembling' the product is the same. From these two analytical dimensions, it is possible t o identify different types of project work. It can be everything from work situations implying repetitive project worlc for an organization, to situations where projects are unique and independent of all other work. To this, we can also add work norn~allynot labeled projects, but functioning like projects in practice - such as renting episodes for employees in staffing firms. It should therefore be possible to describe the main types of project work - and thus project workers -in the following way: AFFILIATION The project
Organisational context
*
4
I. Project-based work
PROJECT
WORK AS
Exception
1
IV. Independent entrepreneurship
II. Renewal project participation
Figure 3:1. A typology of project work situations.
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In the upcoming sections, these four types of project work will be discussed in more detail, and analyzed through narratives from individuals.
Project-based work (type I) This is what most project working individuals do most of their time, and it implies that the individual spends all or most of her time working in different projects within a stable organizational framework. Since the project form is well accepted in the organization, each single project is not that unusual to the individual - it is rather a natural part of an ongoing employment relationship. The individual thus also views herself mainly as a representative for the organization rather than the project something that from time to time also can be said about the project manager. Project work in this form may be contract based customer projects, but many R&D operations are also organized in this fashion. For the individuals constantly working by projects, work means 'starting over again' all the time. While the respective project managers focus on their respective projects at hand, the individuals working by projects experience a long-term trajectory consisting of a long series of projects. The conclusions one might draw from viewing each project as a separate entity are thus not always the relevant ones from an individual perspective. One consequence of this is that projects are rarely designed taking previous experiences and workloads of the individual into account: "...even though I was not as interested from the beginning, since I was still very tired from the previous project. I felt quite apathetic, I must say. I didn't feel fun, not new or anything. Then we ran into some problems on the road that we had not expected at all. It was a bit hard for me t o do something about those problems. I knew exactly how t o d o most things, but I was too tired t o commit myself. Otherwise, I am very committed - let's do it, damn it!" (Carl, systems expert) While the project form of work rests upon the assumption that team members shall be committed and motivated from the start of each project, individuals often feel that not all projects are interesting enough to
THE TEMPORARY SOCIETY AND ITS PhTEhlIES
awaken a sense of commitment. A related problem is that there is hardly any time for reflection and learning between projects due to overoptimistic time schedules and a constant shortage of resources: "In May and June we worked long evenings and weekends in order to finish the project. Then it was not finished anyway, and we postponed it into the autumn, when the next project was supposed t o start. And now during autumn, we worked in the new project during day-time and went over t o the old customer company in the evenings. The project was miscalculated from the beginning, it became much larger than we had expected." (Matthew, computer programmer) Usually, most projects are quite interesting despite the time strains, since each new project is always different from the previous ones in at least some dimension. What happens is that many individuals start t o wonder about their professional development and what kinds of careers that they might be able t o pursue. The 'reward' for committing oneself t o a demanding project is often expectations on an even higher degree of commitment to another demanding project. In their current occupation, the future is perceived as an endless row of new projects, and it is not unusual to find young people who want to leave the project-based operations (i.e. the revenue generating activities of the organizations) for 'strategic' and often less profitable tasks: "Between us, I've told my bosses that I have now been project manager for eight years, and that I find it damn boring. I don't want t o d o this full time, anymore, so we have been discussing other tasks. And one task is projects. Another task is knowledge development, quality development, methods development, coaching junior consultants and so on." (Edith, project manager) If conceived in an unrealistic manner, each project becomes an urgent matter for the team members. The team members, whose main responsibility is t o deliver the project according t o specifications, must then find ways to speed up the project process (i.e. by working more hours per day). In some consultancy companies, consultants are also responsible for generating a certain income, i.e. by charging the customers a specific number of hours per year at a fixed hourly fee. If the market
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price for consultancy hours falls below that fixed fee, it means that consultants will have to add free hours in order t o generate the same income. The result is often a vicious circle, where urgent situations are resolved through heroic action, and heroic action becomes the takenfor-granted solution to urgent situations (cf Perlow, 1997). No one questions why the urgent situations appeared in the first place. In order to enhance project-based work for the individual, most people point at the importance of realistic expectations on each new project and the necessity of working with only one project at a time. The task should be interesting and stimulating t o the team and also important and wanted in the project environment. Moreover, projects should not be too large andlor too long, and the individual should be able t o control her own working hours. In addition, finally, someone other than the individual andlor the project manager should assume some responsibility for career development and other long-term issues, getting an overview of the individual's entire work situation. Most H R M procedures have been designed for permanent organizations where each individual. has a position, not for project-based organizations where positions are non-existent or are changed all the time (ECOSIP, rqy3).
Renewal project participation (type 11) Except for the 'ordinary' repetitious project work (type I), it is also increasingly common that individuals are involved in all sorts of renewal projects in and in between organizations. For the participant, these rcncwal projects are often unique efforts that are something different as compared t o the everyday work situation, and usually the intention is that the organization is to be brought to a higher and better level through a temporary process (cf Blomquist & Packendorff, 1y98a). Renewal projects often emerge from some sort of intentional strategy to improve the functionality of the organization, often inspired by current fashion in the management-consulting sector. Examples of such are T Q M projects, quality certification projects, BPR projects and Balanced Scorecard projects. In addition, there are also renewal projects emanating from the eternal need t o adapt the organization to new external circumstances, such as merger projects, training projects, reorganizations and closedowns. What are common t o all these episodes is that they are a part of the everyday work in the organization and that
THE T E M P O R A R Y SOCIE'I'Y A N D ITS E N E M I E S
only a few individuals represent each project. For some managers, the incessant handling of such projects may lead to a work situation resembling the one in Type I, i.e. a situation in which most of the time is spent implementing renewal projects (cf I,undin, ryyo). The usual point of departure for the individual that becomes a participant in a renewal project is that she should be able t o perform her ordinary job while temporarily committing herself t o the project. For the individuals that are attracted to the renewal effort by interest, this is easier than for those who are automatically involved due to a certain position in the organization. In any case, there are always time conflicts between ordinary work and renewal project participation: "Well, my priorities are with curing the patients, hut on the other hand the management control systems must be redesigned, so... Lately, I have been working ISOX,which is not good, you can't take it for too long. I have green clothes on me, I might be called to surgery any minute. I always work with the management control system in the morning, but then I am on emergency duty. Sometimes I sit at home working before the evening duty, so I hope that this management control projcct can be finished somc day, so that everything works again. It's the same though, for everybody." (George, clinic head) Of course, there are also several advantages for those who participate. One important such advantage is that a renewal project is an opportunity for the participant to widen her competence and show her abilities t o others. In that way, these projects can become both learning experiences and career steps: "Concerning my managerial work here at the clinic, I have had the worst three months ever. Nicole, my administrative assistant, was headhunted t o a private company in the health care sector, and suddenly I had to do everything myself. But I'm happy for Nicole. She was an ordinary nurse when I employed her in the re-organization effort, and she then proved to be an excellent clinic administrator. Now she is country manager here in Sweden for a Danish firm. Luckily, 1 have now been able to find a new assistant." (Barbara, clinic head)
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A problem with renewal projects is that there often tend to be too many of them in contemporary organizations. In complex organizations such as health care, many parallel renewal projects with different 'senders' often end up on the middle managers' desk at the same time, and for non-managerial participants it might look like the organization is just processing an incessant flow of new change projects that never become as revolutionary as they are supposed to. The 'good renewal project', from an individual standpoint, is based on an important cause and well planned from the beginning so that participants can make the necessary adjustments in their ordinary schedules. It is also a project that actually ends in a manner that can be subject to evaluation, and it is important that all participants feel recognized for their efforts. Voluntary participation is, of course, an advantage, but it often leads to problems for the renewal project manager: "One of the main problems is that I have the duty to implement this project, but I have no authority to force anyone else to participate if they don't want to. I f Sophie says that she has to take care of a sales conference instead, I just have to accept that. It does not happen all the time, but there are some clear drawbacks with voluntary participation. What I can do is to be damn nagging. As the project goes on, I just become increasingly nagging and persistent. Everyone else has something else to do, this is not their main concern, so to speak." (Bill, public relations manager) The individual is thus often left on her own balancing the ordinary job and the renewal project. Unlike the case of project-based work (type I), there are often no clear indications from management on how to behave in these situations, and many individuals feel that they never prioritise the right things. For some, this dilemma is temporary by nature, since renewal projects tend to fade out after a while. However, those who are recognized for good performance in renewal projects are usually those that are asked anew when new reforms are initiated.
Temporary work (type 111) 'Temporary work' refers to a work situation in which the individual works in and by similar projects on a regular basis, but where the organ-
THE TEMPORARY SOCIETY A N D ITS ENEMIES
izational context is less important or even non-existent. For example, this is the case for many self-employed and/or free-lancing individuals who assume responsibility for temporary assignments - consultants, journalists, actors etc. In this category we can also include 'temps' (here used in the sense introduced by Garsten, 1999); individuals who are not necessarily involved in projects, but who work with temporary assignments in their ordinary work. This means that they have some formal organizational affiliation to some sort of consulting firm, but that they spend their whole time in different customer organizations as temporary employees with routine assignments. Many temps work mostly by themselves without being surrounded by a team, and they are not expected to become permanent members of the customer organization, which means that they keeplare kept at some distance (cf Garsten, 1999; Lindgren et al, 2001). This kind of projecticised work is not usually subject to deadlines, but it is still limited in time and implies a high degree of social discontinuity for the individuals. In this type, project work is still routine-based, since the individual learns how to handle new projects and perhaps builds up long-term relations with some customers and project owners (i.e. makes the situation more similar to type I). Even though the most obvious example of temporary workers are those who only get temporary jobs or those who are permanently employed in a staffing firm but temporarily "rented out" to customer companies, there are also many others that are mainly affiliated to projects - such as consultants spending all their time at the customers' offices. While project work in this respect shares many of the attributes mentioned above, there are also some specific ones for this kind. One important such attribute is the lack of organizational affiliation, implying a kind of loneliness and shifting social contexts at work: "Loyalties are a bit moved there. Concerning the big telecom company, it's an old account that we have been building up for three years, and we have not switched people there often enough. We cannot have the same people in the same customer's office too long, because then they start to identify themselves with the customer's organization. We had one guy who quit, he is still there but he is not with us anymore. Now, we have taken care of that problem -half a year with the same customer is the upper limit." (Douglas, project manager)
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Except for a lack of close relations and friendship at work, not being a permanent member of an organization also means a lack of expectations on long-term contributions to the organization. They are not expected t o be present for a long time and they do not expect that from themselves either - the result is a temporary, detached, superficial organizational membership cpisode. Temporary workers are there to fulfill a task or deliver a project, and it is up t o them to handle their own competence development and find career opportunities. In addition, aside from the lack of social affiliation, temporary workers with temporary employment contracts are also exposed t o an economic precariousness: "It depends entirely on their status, who they are. There is a proletariat of unemployed actors with very little to do. At least where live theatre is concerned, therc are always a lot of movies and commercials produced. But in live theatre, it's sad - of course you can live on it, but you have to work with contacts everywhere, d o commercials et cetera." (Stephen, theatre director) Among temporary workers, it is not unusual to strive for a situation where permanent employment contracts and/or affiliation to a permanent organization can be achieved (i.e. type I). Alternatively, the individual may try to develop a specific competence that she can bring t o the market herself, i.e. moving towards independent entrepreneurship (type IV). It is hard t o d o both things at the same time, since it means combining short-term execution of income-yielding projects with longterm networking and competence development. In that sense, temporary work as it has been described here is not a stable mode of work for the individual (which is also the case in renewal project participation, i.e. type 11). This is also something that many employers of temporary workers, such as staffing firms, have realized: "...a lot of those who we rent out are employed by the companies to which they are rented out, and suddenly they realize something. This is actually not that bad, you can try two or three companies during a year and then you can feel for yourself if you would like to work for that company or not. You learn how the company works, you broaden your network, and then you might be offered employment. Then the employer and the employee have tested each other, it be-
'THE TEMPORARY SOCIETY A N D l'l'S E N E M I E S
comes like a mutual test employment during the renting period. Then you become employed and everything is fine." (Neil, staffing firm employee)
Independent entrepreneurs (type IV) independent entrepreneurs, finally, are often also working as consultants for customer firms, but they can also be specialists or artists who do temporary work for others on a self-employment basis. People that voluntarily commit themselves to different sorts of non-salaried work or community work are also t o be found in this category. Since the tasks can vary a lot, each project is an exceptional one, and requires a lot of experience and creativity. The freelancing entrepreneur can fill a usual consultant role, but helshe can also serve as sub-contractor to larger project organizations. They lack any organizational affiliation; instead, they commit themselves to each project and build a professional network of other individuals in their "industry". This means a high degree of social discontinuity, and usually also deadline-related stress and an "invoicc pressure" to generate enough revenues to keep the personal economy going even during periods between projects or in competence development. Their life is flcxible and full of exceptions, and it can sometimes be hard t o combine with a re-utilized private life. In a way, it resembles the classic entrepreneurial life path, but with the exception that they do not always start firms (cf Kupferberg, 1998).
"I think that I've always done that - if I had no money, I lust took any job I could gct. I worked during holidays in some ski resort or distributed newspapers in the mornings and things like that. So there are always jobs available if you want some money. I think like that now also, with my new company, that if I get no assignments I could always jump in as schoolteacher or so. There are plenty of jobs that I could have for a while - not until I'm 65 of course, rather to make sure there is some money." (Sheila, consultant) The main motivator for independent entrepreneurs is usually a burning desire t o make an idea come true. If it appears that it is not possible t o transform the idea into a real project within the boundaries of permanent organizations, the individual feels that the wisest thing to do is
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to do it outside these boundaries. The project itself may have deadlines as identified in funding application procedures or seasonal target market variations, but the main restriction is often the time and the resources that the independent entrepreneur can put into the endeavor. Consequently, the progress of the project is usually a result of the individual's ability to organize scarce resources in terms of money, time and (often voluntary) human resources in her social network: "When first came to this school with my daughter, this old feeling came over me from the time when I went here myself. The house, the classrooms, the old-fashioned pedagogy. I did not want that for her, so I decided that I just had to contribute something to the school. I am a doctor, and I have worked with drug problenls for many years. So, I became a board member of the parents association and initiated several projects. Right now, it is not easy, because I have a lot to do at work and I also have this 'prom project' where a group of parents try to organize and attract sponsors for the best student ball ever. But then, I will start again with the drug issues. It is just something that I have t o do, since the school cannot make it on their own." (Claire, parent) As a professional career, independent entrepreneurship does not imply a predictable, straightforward path - it is rather to do like the nomads (Cadin et al, 2000); to do what seems interesting and get increasingly immersed into relevant social networks that can provide some sense of belonging and economic security (cf Jones, 1996). One consequence might be that the individual is offered a somewhat permanent position based on her experience and previous performance, a position that can always be left if something else appears:
"I have always worked by projects, except for my new firm - so far at least. Somehow, I think this is a consequence of starting my professional life in the cultural sector. You don't get many permanent jobs there, rather short assignments. Therefore, I have just slipped into different ventures from time to time - events, exhibitions, husiness advising, regional development, and voluntary work. I actually enjoy working in ventures where I know that my effort is limited in time - I cannot imagine working at the same place until I am 6 5 years old. In a way, my career is thus a result of my personality. It is
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satisfying t o see the results of your actions, but I am often anxious when we are approaching deadlines - what am I t o d o afterwards? There could be a transitory period before the next project starts. I often think that I should actually enjoy a permanent position if the work content was the right one -if you don't like it, you can always quit." (Sheila)
Project work forms and life in the projecticised society Given the multitude of projects t o which modern individuals are exposed, one might ask if this is "just" a work form without connections t o life in general. No, it is not. One reason for this is the temporal connection between work and private life. Projects must be delivered on time, and the individual must therefore be ready t o allocate the necessary time to them - time that must be taken from somewhere else, usually from private life (Eaton & Bailyn, 2000). Another - more subtle - reason is that projects have become a figure of thought, implying that life can and will consist of a number of temporary efforts, critical incidents, adventures etc., that are stimulating and sometimes leads onwards and upwards. The individuals construct these temporary efforts in order t o increase the ability t o affect their life paths in desired directions, and they often become milestones in their subjectively constructed life stories (Lindgren et al, 2001). Examples of experiences thus subject t o projectization are employments, organizational affiliations, moves, holiday activities, episodes in the raising of children or in the marriage, social activities etc. These life form implications of project work are, of course, not always evident. Establishing a narrative connection between long working hours and a lack of time for family life is easier than claiming that a projecticised work situation implies a tendency towards viewing everything in life in terms of temporary sequences of action. It is also not often possible to relate different forms of project work to different sorts of projecticised life forms, since many of the consequences of project work to private life are the same. In all four types of project work discussed above, individuals are exposed to time limits (urgency) and increased demands on generating own income (self-marketing). The work situation thus becomes a result of the individual's own priorities,
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made in an often ambiguous context (self-responsibility).What is different is how different individuals handle these work characteristics in relation to life in general, but before going into that question, we will briefly return to our narrators concerning how urgency, self-marketing and self-responsibility affect their life forms in general: Self-responsibility means flexible working hours. A common experience of many project-working individuals is that it is up to them to decide how to allocate their time and efforts - the individual in the workplace is becoming increasingly de-contextualized. In the traditional debate about industrial working conditions, this has been depicted as an ideal to strive for, but for many project workers this is actually a problem. The individual is always under the command of one or several project managers naturally wanting the best for their respective projects, and there might be other managers demanding attention for different tasks. Often, there is no one else but the individual herself that monitors her entire work situation, and she must thus be able to negotiate against a number of superiors with sometimes fuzzy and conflicting claims while still giving the impression of being ambitious and career-oriented (Eaton & Bailyn, 2000). Since that is not always possible - even in a rather non-hierarchical country like Sweden - the individual is often left on her own to prioritise between different tasks and allocate time to them, respectively. In the end, this usually means flexible working hours, i.e. a flexibility to work extra hours when someone else needs it. Flexible work hours mean flexible family hours. Working extra hours, often at short notice due to emergencies, also means that these hours must be taken from somewhere. Sincc most individuals need a fixed amount of sleep, the extra hours must be taken from the time that would otherwise have been spent with families and friends. In the wake of such behavior, divorces and an eroded social network follow. In addition, since the individual spends most of her time working, work also tends to occupy the mind - even when home with the family, the individual reflects upon work and discuss it with her spouse and friends. "...the important thing at my previous job was that when the new legislation was issued, thc projects should be delivered. There, I led some small projects and also a project big as hell with a large bud-
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get and a team of 16 people. That broke me down, I could say, because I worked 65 hours and six days a week. And that was about the third time that I had no friends left - you lose them, because you are not very outgoing when you are always at work." (Edith, project manager)
Flexible family hours imply a need for family projects or a need for nothing. Given the quite unpredictable and often short time periods that many project workers can spend with families and friends, there often evolves a deeply felt urge t o make as good use as possible of the few precious hours actually available. Otherwise, time will just pass without being devoted to something special, something that could at least partially make up for the usual absence. And what is the best way of achieving something special given a short amount of time and a stream of everyday routines that can easily consume all the time available? To organize projects, of course! One - quite evident - alternative t o create family projects as a response to work projects, is t o do nothing. Constantly being under a high and complex workload may deprive the individual of the energy and creativity needed to initiate something special in her private life, and off-work hours will thus be spent relaxing and recovering: "Mostly I spend timc with my family, with my spouse and our kids. Those outside that... I see my brother occasionally, some close friends now and then, but they don't get much time, they are in the outcr layer. But all our acquaiiltances have small children, they know how it is [laughter]. When you come home you are so damn tired of order, planning and structures, you don't want to accept that at home. You cannot be a project manager at home also." (Douglas, project manager)
Single life and non-employment - ways to handle flexible work hours? Among our project workers, a substantial portion seems to have realized that it is quite hard to combine project-based work wlth traditional life forms such as the core family. Earlier, one individual could usually support a family, that was taken care of by the other parent during work hours - i.e. the traditional life form combination of salaried work practice and housewife practice (Jakobsen & Karlsson, 1993). Today, this life form has changed into a dual career practice in which both
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parents pursue professional careers while at the same time trying to find time to raise children and preserve the mutual love that once was the basis on which their family was founded (Andersson, 1993). If one or both are also then involved in work practices such as project work, this might be too hard for many to handle with satisfying results. Instead, individuals choose alternative life forms in order to escape the strains. One such life form of growing importance is single life, i.e. life without a partner:
"I live as a single downtown - I like to be out, see people, read, take in pictures, go to the opera. When I work I am totally into it, I cannot do it otherwise. Then there are some things that have to be put aside, and that is not so damn funny. Smart guys don't fall down from the sky [laughter]. But this is quite acceptable. Of course there is always the hunting season, and I am a part of that, to find the right guy. But living as a single is not that strange anymore, quite accepted, actually." (Edith)
"A colleague of mine in another authority, Jenny, she has told me what has happened there as the workload became even heavier. Couples with children actually divorce, because then they know that they will at least have every second week available for work only!" (Mary, project leader) An alternative life form is to choose family life over professional life, establishing a non-costly life that does not presuppose high and ever increasing incomes. This is sometimes the case among independent entrepreneurs, who find their life form outside established career practices: "Our house was a cheap one, and we have almost no debts on it. And a very old, very cheap car. And when my husband was to start his company, we did not calculate on how much he could earn. We calculated backwards; how much did we need each month to keep the family going? We also realized that we could skip some costs we did not need any childcare since we were both to work from home. Things like that, counting on a life style, sort of." (Sheila)
THE TEMPORARY SOCIETY .AND ITS E N E M l h S
Who are the enemies of the temporary society? The basic question discussed in this chapter is if the projectization of society has implied a better life for individuals, at the workplace and in life in general. What is clear is that work has changed - not for all, but for many. The range of different forms of employment and work organization is wider than ever, and project-related work forms are just one aspect of this development. What is also clear is that changes in work practices has implied new possibilities for individuals t o re-construct their lives, even though the remaining institutional structures in society has made such re-construction a marginal phenomenon so far. However, it is also clear that these changes are not making life easier for the inhabitants of the temporary society - unless they make conscious efforts to escape them. From the empirically informed discussions above, we can identify some features of life in the temporary society from an individual perspective. First, in its clear-cut form, temporary society will imply an increased de-coupling of the individual from her context. Both work and life in general will be episodic by nature, and there will be an increasing lack of permanent structures, organizations, core families, bases for social identity construction etc - parts of the context will disappear in its current forms. Second, the temporary society will be more open, less predictable, and thus more risky to live in. To an increased extent, the individual will assume responsibility for personal success and failure herself, which points towards an increased inclination to view life as a risky path that must be analyzed and calculated. Third, the remaining permanent structures in society will require even more co-construction by individuals and organizations in order t o survive - structures that we still want, structures that provide a sense of security and belonging. We still want organizations, families, old friends - all which make life somewhat habitual, not only changing. In this defense of permanence, organizations of today are not always supportive when designing working conditions for individuals. If they do not want to become temporary phenomena themselves, they should be. When Karl Popper wrote his essay "The open society and its enemies" (1945),he challenged Plato's philosophies and Marxism by disputing their scientific claims and advocating a society where free individuals changed things stepwise in interaction. Of course, neither Plato nor Marx could directly be seen as enemies of open society at that time.
Rather, the enemies were those who fought for their - according to Popper, totalitarian - ideas in the allowing comfort of the very society that they wanted to do away with. The individuals behind the narratives quoted in this chapter have chosen different ways to work and live, and they have different experiences of living in the temporary society. At the same time, they all find projcctization problematic. While work secm to have become partly more stimulating and individualized, it has also colonized the lives of individuals and left them on their own. In many ways, the enemies of the temporary society could be the individuals that construct it - the very same individuals that we thought to be its proponents and its beneficiaries. It is as if we like the idea of leaving the hierarchical mass society behind, without wanting to live with the consequences of its alternative. Just as in the classical conflict between 'open' and 'closed' societies, the temporary society cannot win without losing its attractiveness. To individuals, projects imply a lot of hardship but also something different, exciting and entrepreneurial. Rut we d o not want that all the time. do we?
Introduction There are many signs that economic activity is becoming organized in a looser way. The traditional hierarchical organization is being transformed and in many cases replaced. Temporary organizational solutions are used to an increasing degree. Sometimes these solutions replace permanent flow-process organizations but more often project-organized activity is combined with permanent organizations. This ongoing transformation is likely to have an impact on many aspects of economic life, not least the institutions. The formal and informal rules and roles, which have been molded by a society dominated by traditional industrial companies, are challenged. In this article I will discuss how the increased use of projects will affect the relations between different actors in the economy. New cost profiles for transactions will change the conditions for contracts of work. Even if changed relations between organizations and customers (the market) are the likely driving forces in this process, the transformation will also influence the contractual relations between the organizations and the individuals. In the last years a lot of attention has been paid to thc increasing numbers of non-permanent employment ("project work") and the deterioration of formal contractual relations (Aronsson, 1999; Quinland et al., 2000). In this article the focus will be on informal contractual relations. These are, of course, harder to grasp than the formal ones and also much less studied. Still I think that
they have a profound and long-run impact on how, when and where people will work. The change from one kind of transaction costs to another will affect the preconditions for the logistics, the timing and the location of economic activity. But before entering the discussions on contractual relations some tendencies of the general organizational transformation must be outlined.
Towards a project-based economy In yesterday's economy the industrial companies were the role models of organizing. Today industrial robots and computerized procedures have taken over much of the physical production, which in turn accounts for the trend that direct industrial employment is decreasing in most developed countries, while industrial production is still going up (Vivarelli & Pianta, 2000). The percentage of the work force in industry (manufacturing sector) in the most industrialized countries has decreased during the last decades. At the same time there has been a long run increase in what is called production services in e.g. USA, UK, Canada, France, Germany and Sweden since the 1920s (Singelman, 1978; Aoyama & Castells, 1994; Castells, 1996; Myrholm & U11strom, 1997). The most rapid expansion in the last decade is to be found in the data consulting industry (Johansson, 2001). These companies are deploying services directly supporting industrial companies. Consequently the reduction of industrial employees (at least in relative terms) is actually compensated for by a rapid increase of persons occupied in industry-close service companies, i.e. independent companies working with project assignments for industry (Eliasson, 1992; Illiris, 1996). The activities of the service sector are thus first of all a complement t o industry and consequently not compensating for industrial activities, contrary to the ideas put forward in the debate on the Service Economy (Gurshuny & Miles, 19 8 3). Resides these changes at the macro level there are also signs of a more extensive use of projects inside organizations. All in all one can say that this "neo-industrial" develo p ment goes with another kind of organizing between as well as inside economic units. In other words, we are not experiencing the end of industry, or of industrial production, but we see that industry is changing and taking on new, alternative forms where production per se is less in focus as compared to
CONTRACTS OF WORK I N A PKOIECT-HASEU E C O N O M Y
previously. The demand side, for example, marketing, customer focus and creation of brand names occupy management more and more (Ekstedt et al., 1999). The use of projects or temporary organizations is one of the main features in the described neo-industrial economy. By projects, one can of course understand different things. As a minimum they seem, however, t o have the three t's in common: time, task and team. Projects are mostly defined by the task they are supposed to fulfill during a specific time. The resources available for the task are often described in terms of a team (Lundin & Soderholm, 199s). In most cases members of a project understand the meaning or the intent of the organizational setup, while it is common that members of a permanent organization only understand parts of its activity and goals. Projects and temporary organizations are superior to permanent organizations in some crucial respects. They are action oriented and focused, at the same time as they allow for flexibility. They are however generally inferior to permanent organizations in other areas. The decision oriented permanent organizations have mechanisms for knowledge formation that enables them t o act on solid grounds. The apparatus for rhetoric production in these organizations helps them strengthen their brand name. A Company with a strong brand name may on the other hand harbor and create many projects (Ekstedt et al., 1999). In theory it therefore seems to be a natural division of work between permanent and temporary organizations, while in practice this division often is hard t o accomplish. The more extensive use of projects and temporary organizations coincides with changes in formal work contracts in many countries. Some authors have tried t o measure the changes of contractual relationships on a European level. The variations in concepts and definitions make such an effort difficult, however. Yet, by avoiding expressions like "precarious" workers, project work and "contingent" labor and instead focusing on general concepts like non-permanent work, part-time work and self-employment it is possible to come to some conclusions about the development of formal time-contracts. In the 1980s and 1990s there was an increase in part-time jobs and non-permanent jobs. The number of non-permanent contracts in the EU reached a peak of 1 5 percent in the middle of the 1990s Since then it has stabilized or even decreased (Goudswaard & Andries, zoor). To estimate the number of self-employed is more complicated as the distinction between self-employment and wage employment is rather weak. One author
(Letourneux, 1998) calculates that self-employment accounts for 18 percent of total employment in the Union, while others (Goudswaard & Andreis, 2001) who refer to the Third European Survey on Working Conditions, conclude that the proper figure should be around 10 percent. These differences give rise t o questions about definitions. For example, t o which category, does a self-employed person, who only works for one company, belong?
Time aspects of organizations and employment Two major tendencies have been focused on up t o now. O n the one hand an increasing use of project organized economic activity can be seen in the long run and on the other an expansion of temporary (nonpermanent) employment in the short run. Both are likely t o have an impact on the contractual relations of working life. There is certainly no simple relation between project organization and temporary (project) employment. There are for example persons who have a permanent job in project-organized activity. Most consultants work under this type of arrangement. In those industries, as well as in others, there are also those who are temporarily employed for a specific project, while others could be self-employed. In the Swedish construction industry, workers are not employed for a particular project, but by the Construction Company. In other countries, for example England, craftsmen are often seasonally employed. Actually there seem t o be several forms of flexibility in operation at the same time (Atkinson, 1984). In the following I will try to structure the discussion around these relations. In the book " Neo-industrial organizing - renewal by action and knowledge formation in a project-intensive economy" we combined forms of organizing (flow-process operations versus project operations) and forms of employment (permanent employment versus temporary employment) (Ekstedt et al., 1999). This model is going to be further elaborated in this article with respect t o changed market relations, changed transaction costs and changed contractual relations. The starting point is the four idealized types of organizations one receives from the above-mentioned combination. We name them respectively: Industrial organizations, Non-permanent activity, Project-based organizations and Self-employed professionals. These relations are presented in figure 4: I :
C O N T K A C ' r S OF W O R K IN A PROJECT-BASED ECONOMY
I
PERMANENT EMPLOYMENT
TEMPORARY EMPLOYMENT
lndushial Organizations
B. N o n ermanent activity
FLOWPROCESS OPERATIONS
- Traditional industrial compa-
- lndivi
C. Project-based organizations
D. Selfemployed professionals
PROJECTIZED OPERATIONS
- Commissioned companies;
- Individuals who sell their
technical, organizational, IT, management consultancies and subcontractors. Characterized by: Recurring pro'ects operations. Weak PO on strong TOs - Contractors hosting and creating projects; Construction, ICT and entertainment companies. Characterized by: Small PO with strategic functions, harboring project teams for development and production
services to A and C, or who create projects ('free agents'): E.g. Freelance writers/ journaIists/artists/craftsmen, consultants, construction workers Characterized by: Absence of PO
nies, call centers, component producers and public services. Characterized by: Assembly line production, multi-level managerial decisions, stationary real capital, bureaucracy. Strong PO and weak TOs
d
( PO
=
B
uals on temporary assignment in A or C. - Temporary agencies which lease out staff to client companies: E.g. typewriting/office/specialist service. Characterized by: PO with broker function
Permanent organizations, TO = Temporary Organizations
Figure 4:1 The relationship between the organizational form o f economic activity and the time-contract between the organization and the individual.
The characteristics of the organizations in the different categories of the model and the examples discussed in the following are based on the findings from three major empirical research projects recounted in three different books. The first one deals in depth with organizational forms and knowledge formation in the capital intensive paper and pulp industry, the labor intensive construction industry and the knowledge intensive IT-industry ( Ekstedt, 1988). The second is about knowledge formation and renewal in the construction sector (Brochner et al, 1992). Besides more than 60 interviews with actors from different parts of the Swedish construction sector, also Japanese, American, French and British companies were interviewed. In the last book we have
I
ESKIL EKSTEDT
closely followed renewal projects over long periods of time in both flow process and projectized organizational contexts (Ekstedt et al., 1999). Some of the organizations are multinational companies and a number of the interviews have taken place outside Sweden. Since 1999 1 have also conducted a large number of interviews about the organizational structure in ICT companies, manpower-leasing companies (temporary agencies) and in call-center activities. Permanent employment is a standard for organizations that mainly organize their activity as flow-process operations and the A quadrant is thus the typical combination for the industrial organizations. A large part of public service production and call-center activity for example, also belong there. The production of standardized products or equivalent services in long series provides a foundation for stable relations between actors. In heavy industry the stability is further strengthened by immobile machinery, built to function for many years. The car factory has often been seen as the role model for traditional industrial companies. The discussion about "lean production" which had a great impact on organizational change in many branches in the 1990s stems from examples of Japanese car manufacturing. After reconstruction and a further division of activities in industrial companies the subcontracting producers of components remain an important category in quadrant A. The structural changes also develop into other kinds of support activities. The growing ICT and media sectors have a great demand for instant customer support. Different kinds of "call centers" have been established in many places. The telephone or ITbased services these factory-like companies offer in most cases only demand short introductory training. In areas severely hit by transformation of traditional industry, like the mining and forest industries, the reduction of employment opportunities has been compensated by this kind of activity. In some places there even seem to be clusters of companies in this branch (Ljusdal). There are companies in small cities with as many as 1000 persons under the same roof (Karlskoga). Even if traditional industrial organizations are dominated by permanent organizations they d o run projects themselves. Project organization is particularly frequent in connection with development work. Persons from different parts of the hierarchy can participate in projects. But so can also persons from other companies, like subcontractors, customers or independent consulting companies. In, for example, the forest industry these constellations often include members of special-
CONTRACTS O F W O R K IN A PROJECT-BASED ECONOMY
ized international companies dealing with both technological and organizational aspects of the trade (Ekstedt, 1988). The combination of flow-process operations and temporary employment is less common, but seems to be gaining ground. We name the B quadrant Non-permanent activity. It includes both organizations and individuals in temporary employment. More and more companies, which lease manpower t o other companies, are established. These firms have a broker function; their customers eliminate costly search processes to recruit staff for tasks that are only of short duration. But there are also other arrangements belonging to this group. With modern "distance-bridging" technology permanent or part-time "homework" and work in a specific tele-workplace is a potential way of organizing economic activities in many areas. There are estimations that around 30 percent of people working in an office will work part-time or fulltime in a tele-workplace in 2010 (Cuhls, Blind & Grupp, 1998). The manpower-leasing companies (temporary agencies) have primarily occupied themselves with rather routine activity, such as typing and office service. The spheres of activity seem to become broader as well as more advanced at the present time, however. Individuals with long formal education and training are hired. It is not uncommon that various economic and bookkeeping functions are offered (insourcing). Special agents are also working with the leasing of physicians and nurses. This organizational form requires a short period of acclimatization, though, and the work tasks consequently have to be rather standardized or performed by independent professionals as in the case of the physicians. The scale of this activity seems to vary between different countries. In Sweden hardly one percent of the labor force is involved in this group, while in the Netherlands the corresponding figure is much higher (according to the Dutch Employers Union statistics). Figures for all of Europe are difficult to estimate and even if there has been a rapid increase in most countries they still rarely exceed 2 percent (Goudswaard, 2001). The fast growth of individuals working on short assignments in different companies is much greater than work in temporary agencies. In Sweden the number of males in this kind of activity has increased from less than 3 percent to almost 8 percent from 1989 to 1999. The corresponding figures for females are somewhat higher (Statistics Sweden). The figures for Europe are around I 5 percent, as mentioned before. It is towards the combination of projectized operations and perma-
nent employment that the long-run development is directed in the first place. For the sake of simplicity we name organizations in the C quadrant Project-based organizations. The construction companies have worked in this way naturally and by tradition. In one single working site up to one hundred organizations in a sub-contracting system can be engaged. There are however, variations in the organizational solutions of the construction sector even if they mostly belong t o this quadrant. A traditional solution is when a general contractor uses both in-house and hired units for a project (Sweden, Germany). But the solution gaining ground in many places is the project management model (USA). In this model the management company uses subcontractors for all activities but the relations t o the customer and the management of the projects. Their main resource is knowledge of project management (BrGchner et al., 1992; Ekstedt, Lundin & Wirdenius, 1992). The organizational solutions in the construction sector can be seen as the role model for all projectized activity. It is common that experienced project managers from the construction sector are recruited t o run projects in other parts of the economy. IT, management and technical consultants are examples of specialist companies that carry out assignments within their specialist field in large companies. An advanced consulting activity has been a natural and increasing part of a successful industrial activity. In these companies there are just a few people dealing with long-run overhead functions. Most of the action, especially that close t o the customer, takes place in projects. But also in some of the major companies the focus has been altered. The new core activity, like development and the creation of unique solutions for customers has been projectified. Large, former industrial companies have therefore actually moved to the C quadrant. Small permanent organizations with strategic functions and a strong brand name harbor project teams for both development and production consisting of persons affiliated to a lot of different organizations. Even if the concept Project-based organizations tries to describe relations inside organizations there seem t o be similarities and also links t o the concept of cluster, which describes relations bctween companies and branches (I-'orter,rqq8). When a contractor designs a project the team members often represent many different but related organizations. The team members are chosen within a cluster of a specific knowledge sphere. But the links between the companies in an industrial park can also be of help when forming a project. The small scale ski-
CONTRACTS O F W O R K I N A F R O J E C T ~ B A S E DE C O N O M Y
lift producer "Liftbyggarna" in Odenskog industrial park in Ostersund has transformed its activity in a dramatic way during the last ten years. In the beginning of this period the personnel of the company designed, produced, installed and sold the equipment all by themselves. Today, most of the production is outsourced to small engineering companies in the park. The top manager now and then walks by his neighbors t o encourage them to deliver in time, glad not t o be responsible for the supervision and organizing of that work. Instead he and his fellow coworkers can concentrate on designing lift system solutions according to their customers' expectations and with a good knowledge of the place where the future consumers will enjoy skiing (Ekstedt, 2 0 0 ~ ) . In the combination of projcctized operations and temporary employment self-employed professionals can be found. And this is accordingly our designation of the D quadrant. To stand a reasonable chance of contributing to a project, the participants need t o have a good basic knowledge on which to rely, but that is not sufficient. The individual must also be renowned for keeping up with the competition in the market. The reputation is usually due to the fact that the individual has shown an extraordinary ability in some respect. To attain marketable knowledge is often connected with heavy investment costs in the form of extensive training in the "hard school of life", yet the reward may be great. Being a well-known personality may itself be a part of it. For writers, sportsmen in individual sports, freelance professionals within different dominions or self-employed, the lack of permanent affiliation to an organization could be a highly valued freedom.
From the permanent to the temporary To sum up one can say that the organizational changes follow some distinct patterns. First of all there has been an increased use of project organized activity for several decades in most industrialized countries. The growing number of people working in quadrant C is striking. There is also an evident trend running from A t o B. One also has the impression that the D quadrant is expanding, even if it is hard t o quantify activities that are partly outside the open labor market. Still, permanent organizations will not disappear, as there always is a need for long lasting structures, a kind of strategic infrastructure supporting economic activity. They are for example superior when it comes to
E S K I L EKSTEDT
knowledge development and transfer (Ekstedt et al., 1999). Permanent organizations are also needed to host temporary organizations and there is still a lot of standardized production run by subcontractors who are permanently organized. A main challenge for the managers will be t o cope with the division of roles between the permanent and the temporary. The trend towards the temporary can also be noticed inside large companies. The launching of ABB's Tso program not only emphasized the need to make the production side more efficient. Methods of radical reduction of throughput times were introduced together with efforts t o better meet the customers' demands (Boman, 1992). The first goal, t o improve the lead time, was adopted by many actors, including those in the public sector. The second goal, t o focus on customer demands is signaling a more profound organizational change of traditional industrial companies. The large hierarchical organizations obviously found it increasingly difficult to engage their members in the problems of their customers. This situation was once more stressed when the telecom company Ericsson officially stated that they were t o be seen as a "service" and not an industrial company; a message for the market aimed t o put pressure on the co-workers of the organization. This new road has since then been followed by Ericsson. Many production units have been sold out. Small cities like Karlskrona, Soderhamn and Ostersund are becoming dependent on the international (American) component producers of Flextronic, Emersson and Solectron respectively. This kind of externalization or outsourcing is even more pronounced in other branches. In the case of the aeroplane producer SAAB Aircraft one can see that every new plane model has been produced in a more externalized way. When it comes t o the last models, SAAR Aircraft mainly holds a kind of systems responsibility. A dominant part of the production is performed by subcontractors from all over the world, while the company itself, deals with logistics, design, research and development, marketing and finance (Henning & Norgren, 1992). Today responsibility for the system has moved to even larger actors, like Airbus. The reasons for the expansion of the project organization can be found on both the demand and the supply side of the economy. O n the demand side one can point t o long run changes in consumer patterns. The individualization process in industrial countries increases the need for close contacts between the actors of the market (Ingelhart, 1990;
CON'L'KACTS O F WORK IN A PROJECT-BASED E C O N O M Y
Ester, Halman & de Moor, 1994; Scott & Meyer, 1994). Customers want to be able to influence the design and quality of goods and services. Increased purchasing power together with the new demand patterns call for more complex and advanced products. Material goods are linked up with various types of unique services. Consequently, the companies are offering products with an increasing experience and knowledge content. Direct dialogue or negotiation between the actors of the market becomes more common. Unique demand can be met by advanced knowledge specially designed or developed by the team members of a project. By organizing the knowledge production in the form of a project it is possible to exploit contributions stemming from different specialties and traditions (Lundin & Midler, 1998b). A project team may consist of people from the R&D department, the subcontractors, the customers, the consultant companies and the universities. A "pluralistic integration" of this kind opens up a development potential not imaginable inside a development department with a permanent staff. If the changed consumer patterns promote project solutions, they are facilitated by the great flexibility that comes with the development of the information and communication technology (ICT). Adaptation to specific demands of individual customers becomes possible. ICT is a tool able t o change both time and space aspects of the economy. It facilitates the interaction in work life and makes it possible t o gain instant information on what is happening anywhere on earth. Modern control engineering makes possible immense variations in the design of production. Products and services can be combined in many ways (Beniger, 1986). But the rapid development of ICT also influences the design of organizations indirectly (Orlikowski, 1992). The division of labor inside and between organizations can be altered: the physical potential of decentralization knows almost no bounds. Managers may control an economic activity where geographical distances are of little importance. Individuals performing the same work task can be separated, although the exercise of supervision and power remains the same. Project organized management, design-teams and development activity can be combined with outsourced neo-tayloristic production of components. Mentally, the decentralization of organizations may come t o a limit, however, when direct human interaction and the organizational identity which unites people fade away.
Market relations, transaction costs and contractual forms in different kinds of organizations The increased use of projects and temporary organizations is likely to affect the contractual relations between companies (organizations) and customers (the market) as well as between companies and individuals. The question is how. The change of the formal contract is in most cases rather easy to describe, as this is re p orted in regulations and legal texts. The changed relation between permanent versus non-permanent employment, for example, is in itself a reflection of changed formal working contracts, at the same time as the increased use of temporary employees is an indication of a growing importance of informal contracts. The increased use of project organizations is an even stronger indication in that direction. Most informal contracts are however very difficult to grasp. In the following I will approach this problem by discussing the relations between organizations and customers and between the organizations and the individuals in a theoretical context. The relations between the organizations and their customers are important as changed consumer patterns, as already discussed, can be seen as the driving force in today's general transformation process. Changed relations between companies and customers are also in many cases a background to organizational changes inside companies. Hirshman's categories of exit and voice will be used t o structure this relation as they directly show informal contractual relations between the two parties. The exit option is described as: "Some customers stop buying the firm's products or some members leave the organization". While voice is a totally different option:" The firm's customers or the organization's members express their dissatisfaction directly to management or to some other authority to which management is subordinate or through general protest addressed to anyone who cares to listen". In both cases the management must be engaged to search for the causes and possible cures of customers' and members' dissatisfaction (Hirshman, 1970). The internal changes will in the following be illustrated by the way in which transaction costs are distributed. This distribution of costs is also a way of showing what kind of economic ties (informal contracts) are at hand (Coase, 1988; North, 1990; Sjostrand 1993). These informal contracts structure economic activity and are, for example, guiding the actors when it comes to how, when and where to work.
C O N T R A C T S O F WORK I N A PROJECT - RASED E C O N O M Y
This thinking will in the following be applied t o each of the four quadrants of the model presented earlier. By pointing at the market relations and transaction costs a framework for discussing informal contractual forms evolves.
A. Industrial organizations This model of organizing is first of all adapted to the production of long series of standardized products. The market tests the attractiveness of the outcome. Exit mechanisms of a "take it or leave it" character dominate even if there are exceptions. Some component producers and call-centers are linked to one or just a few buyers. Other component producers live in tough international competition dominated by regular exit mechanisms. In the typical case of quadrant A there is a minimum of relations between producers and customers. Consumers are buying commodities without knowledge of how it was produced. A lot of the components in, for example, electronic equipment are produced in developing countries under conditions of which we have limited knowledge. There can also be long periods of time between production and purchase. In slack periods the companies' stocks build up. Organizations in this quadrant are characterized by a hierarchical decision system that keeps transaction costs down for intra-organizational search processes and time-consuming internal negotiations. The organization can be efficient with a limited interaction between levels, departments and individuals. This system is marred by considerable monitoring costs, however. Decision-makers build up many levels between themselves and those who in fact perform the economic activities. Special functions for supervision and control are built into the system. Long lasting formal contracts (often collective) have dominated this kind o f organization in most industrial countries. This order has been challenged in some major industrial companies during the last decade. When for example ABB, at the end of the 1980's introduced the TSO model (aiming at a reduction of lead time by 50 percent), one of the most important tools was "the goal-directed groups", which can be seen as a dramatic change of the working contract. Instead of being exposed to colltinuous control the employees got the responsibility of a whole working sequence; from order to delivery. This change could
ESKIL E K S T E D T
also be understood as a projectification process. ABB became more like the companies in quadrant C (Ekstedt et al., 1999). In the harsher economic climate in the middle of the decade and among component producers, the development seemed, however, to be going towards the opposite direction. One can even talk of neo-tayloristic tendencies. Sophisticated methods to measure time and work efforts were developed (for example; demand flow technology). Sometimes, these models seem strikingly similar to traditional industrial relations (Engstrand, 2001).
B. Non permanent activity In this quadrant a substantial number of people with short work assignments dominate. As we have seen, around 15 percent of the labor-force in the EU are temporary employed. The rules are still formalized for most of these people, but apply only for shorter periods and differ between groups of workers. For some groups there are even obvious threats to the formal contracts. In Sweden, for example, there are signs that some temporary employed do not dare to make use of their legal right to five weeks of vacation (Aronsson, 1999). A much smaller but growing category are those who work for employment agencies. The agencies work as brokers, with close contacts with the client companies. The contractual relations of these companies are different from those of other companies. The individuals are hired by the agency, while he or she is supervised by the clientcompany. The agencies therefore have high search, information and negotiation costs, while the monitoring costs are minimal and transferred to others. The personnel hired solely are fully paid when working. During periods when no work is offered they consequently receive less compensation. How much less is regulated in some countries. Work in this quadrant is characterized by flexibility. It is more or less taken for granted that the employees shall show up at an appointed workplace at short notice. The expected flexibility also includes commuting to different places. For specialized labor, like physicians, it is not unusual to commute to remote places where it is difficult to attract individuals for permanent employment.
CONTRACTS OF WORK IN A PROJECT-BASED E C O N O M Y
C. Project-based organizations Traditionally, the industrial company participated in all kinds of activity; from production to market relations. It controlled the internal resources, the subcontractors, the consultants and it also hosted the development projects. The company was truly the nexus of all contracts. It was also the bearer of the brand name; a brand name necessary for success in the market. The expansion and spread of projectbased organizations challenge these structures of organizing. Most project-based organizations work in close contact with their customers. Commissioned companies form projects together with, for example, development, design, planning and personnel units of industrial companies. The economic activity is often closely related to the way in which the demand of the customers is expressed. It is common that sellers and buyers work together on the same projects. The exit mechanism of the market is to a noticeable extent being replaced by voice and t o some degree loyalty. Loyalty or trust (a word frequently used these days) may develop into situations where competition and market relations are threatened. This dark side of the intimacy of economic transactions has in periods been debated in the Swedish construction sector, for example, but have almost been forgotten in modern discussions about networking (Brochner et al., 1992). Some of the more successful companies have developed sophisticated negotiations methods to handle the voices of their customers. The multinational contractor Skanska performs most detailed contractual discussions with its subcontractors. High negotiation costs in the early planning stages of a project will be reimbursed if it contributes to fewer mistakes when the whole production apparatus is involved later on (Ekstedt & Wirdenius, 1995). The relation to the customers is directly reflected in the internal organization of project-based activities. Costs for monitoring (supervision) are minimized, as it is in the interest of the project members to perform the assignment according to the description of the aims. They of course want to be engaged also in future projects. Instead there are high costs associated with contracts and negotiations. It is also likely that collective contracts must make room for individual negotiations, to support the project members in the unique situation of each project. The ability of employees to negotiate will consequently be of immense importance for their work conditions (Ekstedt et al., 1999).
The project organization implies that both the spatial and the timebased relations between the actors will be manifested in a number of different arrangements. The work is performed in a great variety of ways, in a great number of different constellations, and at a great number of places. Also the rate of working can vary quite a lot. Certain periods in a project are characterized by low activity, while others are marked by working round the clock. In many projects influence and responsibility are to a great extent delegated irrespective of the kind of formal rule system. Therefore this way of working could be experienced as a threat to the present relations of the labor market. In the project organization the work is goal and problem directed instead of rule directed. Fulfilling the goals according t o a given agreement is the central endeavor; how this is accomplished is left more open. A detailed regulation of the relations between the actors could be perceived as a hindrance. The change from traditional industrial organizing to project organizing may consequently be expressed as a shift from monitoring t o negotiation costs, which has a dramatic impact on the contractual forms. The formal contract has to be designed in a general way and make room for individual specifications and negotiations. Contracts of how, when and where to work must to a high degree be informal and implicit. In the construction sector it is common t o talk ahout professional codes guiding the members of a team in the different phases of a project. The individuals adapt to these codes by long lasting practical experience and from working with individuals knowing the trade (Polanyi, 19j8;Brochner ct al., 1992). In other project-based branches these kinds of implicit rules have not developed yet. Management and IT companies follow a different approach. They try to induct tacit contracts by convincing the customer t o use their concepts and follow their specially designed programs. Many consultant companies have taken great pains to develop special methods for working and for solving problems. Before entering the market the personnel have t o be trained and convinced of the ideas. It can be both costly and time-consuming t o replace staff who already are a part of this special company culture. The investments in human capital may pay off, however, as the models used are company specific, which make it possible to keep the customers - and the employees locked-in for some time (Ekstedt, zoo^). Other actors of the C quadrant are independent enough t o create
CONTRACTS O F WORK I N A I'IIOJECT-BASED E C O N O M Y
new informal rules. I am hinting at the organizations which define and create new fields of action; the spiders of the networks of projects. These spiders must be as shining and attractive as butterflies; able t o guarantee trustworthiness and t o attract all kinds of business partners and customers. They are in a sense like the project management companies in the construction sector, but with superior capacity t o create new business ideas through an attractive brand name and a great potential of development and innovation activity. Some industrial companies seem to be moving this way through extensive outsourcing of plain production functions. Some may succeed in developing these new capacities. But the risks of failing are many, not least if the transformation process leads to unemploy~nentand thus damages the brand name. The independent Polish division of Skanska can illustrate the phenomenon of a "shining spider". They are quite aware of their special role and name themselves a developer and not just a contractor. It is easy t o understand why. The top management starts a comprehensive business project by buying an attractive lot. They then design a complex of buildings in dialogue with the local authorities, often in competition with other companies. The next step is to get financial institutions interested in financing the project. At this phase of the project the well-known brand name is very useful. After the period of planning contractual discussions begin. In most cases Skanska takes care of the construction management role themselves, while a lot of both international and local subcontractors are engaged t o erect the building. During this phase they are also trying to find the right tenants for the exclusive offices they are constructing. At the end of the project the developer starts looking for a new business opportunity. When a new project is on its way the old buildings are sold - if the right customer shows up (Ekstedt, 2001). In projectized activity it is not only essential t o have a good knowledge about the tasks involved but also to have good relations and knowledge of potential project members and business partners. Considerable costs are spent on the search for information and knowledge in the process of forming a project. Closeness to the customers makes it easier to discuss with them and to develop unique economic solutions. Closeness to other team members both in space and culture facilitates the process of team building and knowledge formation. Successful projects are often created in a specific knowledge intensive environment,
E S K l L EKSTEDT
e.g. an industrial system. Concepts like systems of innovation, clusters, networks and development/knowledge blocks relate to this idea (Porter, 1998; Maskell et a]., 1998). System thinking concentrates on the relations between permanent organizations, however, while projectized economic activity aims at forming new organizations. But the stress on knowledge formation is shared by the two approaches and is also in line with modern economic growth and development thinking in general (Romer, ~ 9 9 ~ ) . Project based organizing consequently also has a local side. The economic activity, i.e. the production and the exchange of services, takes place where production establishments and people are to be found. The ever greater service content in almost every activity creates a need for closeness. The work of the companies is performed in direct interplay with the customer, where he is active. This entails, among other things, that the commissioned companies tend to locate local branches with far-reaching independence in smaller cities. International companies, like Skanska and Cap Gemini, have settled down in many Swedish medium-sized and small cities. There they participate in projects together with industrial companies, municipalities and county councils. Global renommCe is paired with local presence (Ekstedt et al., 1999).
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D. Self employed professionals
The absence of an affiliation to some organization forces the individual to answer for the negotiations with other actors himself. It is not uncommon, therefore, that the individuals in this exposed situation try to strengthen their position, in a market that in many respects is short of rules and clear roles, by seeking support in professional organizations. In certain professions, like boxing, specially designed promotion companies appear. At any rate a loud voice - it could be a hired one is necessary to make oneself heard in the actual markets. The costs of making a name for themselves might be lower for the professionals in densely populated center areas. When the individuals are already known, distances are of lesser importance. The opportunities of being updated and in close contact with the market is increasing in pace with the IT-revolution. The technology promotes full- or part- time home working. Professionals like journalists, writers, and architects etc. can live wherever they like and still be connected when needed.
CONTRACTS OF WORK I N A P R O J E C T-B A S E D ECONOMY
Market relations, transaction costs and contractual forms in the four types of organizations discussed above are summarized in figure 4:2:
PERMANENT EMPLOYMENT
TEMPORARY EMPLOYMENT
A. lndushiol Organizations
B. Non permanent activi?.
FLOWPROCESS OPERATIONS
- Exit-mechanism dominating
- Persons in
PROJECTIZED OPERATIONS
- Voice and loyalty dominating
market relations, limited relations between market and internal organization - Limited negotiation and search costs and great monitoring costs inside organizations - Formal contracts (collective) - Closeness to production resources
C. Project-based organizations market relations, tight relations between market and internal organization - Limited monitoring costs and substantial contractual and negotiation costs inside organizations Informal contracts and individual negotiations im ortant. - Closeness to know edge intensive environment [other team members) and customers
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P
temporary assignments are meeting exit-mechanisms - The organizational arrangement reduces negotiation and seorch costs in the labor market - Formal contracts, but shorter and less secure than in A -To be available at different locations
D.Self-employed rofessionals -Voice; Great e orts to make a name for themselves in the market and to keep updated - Limited transaction costs as organizational set up is almost missing; costs for professional affiliation - Professional codes may guide the way of working - Contact with the market
P
Figure 4:z Market relations, transaction costs and contractual forms in different kinds of organizations.
Conclusions Work contracts are closely related to the way economic activity is organized. The presented model gives a rough but useful picture of the characteristics of different organizational forms. By pointing at the changed prevalence of the four main categories it is possible t o discuss the content of the organizational transformation in some depth. The dramatic change of market relations and transaction costs when moving from onc category to another gives a platform for describing the changed
contracts of working life. It is even possible t o discuss the development of informal rules (contracts) guiding the actors when it comes to how, when and where t o work. The organizational changes follow some distinct patterns. First of all there has been an increased use of project organized activity for several decades in most industrialized countries. The growing number of people working in project-based organizations and project-based activity is striking. There is also an evident expansion of people working in non-permanent activities. The expansion of temporary agencies is part of this. The number of self-employed professionals is probably also increasing. However, this does not mean the end of industry, but it does point to the developnlent of new, often temporary, forms of organizing. Permanent organizations will certainly not disappear, but they will take on some new roles. They are needed to create and host temporary organizations and there is still a lot of standardized production run by subcontractors who are permanently organized. Many industrial companies, which at one time had almost all activities under the same roof, have been transformed into - or lend their name to - a co-ordinating organization which assemblies, designs and develops systems of articles combined with services and externalized component production. One can actually see both projectification and neo-taylorism at the same time: there is both an increasing use of temporary organizations in the form of projects, and a growth of a minute, global work division specializing in manufacturing of different components. The organizational spheres are, however, much looser in their composition than the traditional industrial companies and they can also q ~ ~ i c kchange ly in size owing t o a varying supply of projects. In some fields of action, ICT for example, the spheres may also be very sensitive t o fluctuations of economic demand. The changed relations between the companies and their customers are one of the major driving forces in the projectification process. When developing more complicated and unique products the relations between producer and consumer become tighter. Exit mechanisms dominating the market relations of traditional industrial organizations are exchanged for voice and sometime even loyalty in project based activities. The closer ties of the economic activity also made their marks on the internal organizing of the companies. Traditional industrial companies were characterized by limited internal negotiation and search costs and great monitoring costs, while the cost profile of the project-
C O N T R A C T S O F W O R K I N A PROJECT-BASED E C O N O M Y
based organization seems t o be the opposite. Limited monitoring costs are accompanied with substantial contractual and negotiation costs. The low monitoring costs make it ~ o s s i b l eto build up very large organizational spheres, but also, without too much effort, t o change the size of the activities. The organizations boundaries are fading out. The structure of the transaction costs gives a good indication of what the contractual relations loolz like in different kinds of organizations. In industrial organizations the contract is set in formal rules (negotiated with the unions) and the employees know what is expected in the longer run as well. With a development towards more temporary employment, the rules are still formal, but they are also less secure and apply for shorter periods only. There are also marked differences between groups of worlzers. With the development towards projectbased organizations, the formal contract becomes more general and will be repeatedly renewed a t the beginning of each project. Individual negotiations become more important, as well as the ability of employees to negotiate. These changes undoubtedly have implications for labor relations and the role of unions. In fact, it is likely that many institutions of traditional industrial society will encounter difficulties when much of the economic activities take place outside the boundaries of its core organizations, the industrial companies. What is expected of the co-workers in project-based organizations is more implicit than in industrial organizations. Ideas of how, when and where to work are molded by informal contracts. There are long traditions of project organized activities in for example the construction sector. The work methods have been transferred from one generation t o another. Other industries are looking for new methods of how t o work in projects and the number of courses in project management at universities and other educational institutions have expanded dramatically. The traditional tacit lznowledge formation of work methods is exchangcd for articulated knowledge, packaged in different kinds of certificates. The implicit contract also suggests when and where to work. The time and space dimensions of project-based activity are very different from those of the production of standardized products in long series at stationary factories. There is an end to a project even if it is a recurrent activity. Project members are aware of this. They are also aware of that participating in project-based activity often means working at different places; e. g. in a knowledge dense environment, at the
customers' premises or where a special event takes place. The time and space dimensions of project organized economic activity can be illustrated by the carnival "Storsjoyran" that takes place in July every year in the northern city of ostersund in Sweden (Ekstedt, 2001). A permanent organization of four individuals transforms into a temporary organization of several thousands for a few weeks. Actually this event gives a substantial income contribution to a lot of indiviuals in the area, but also t o individuals from elsewhere. The permanent organization is a small scale shining spider, a project management organization, with a capacity to create a project with such a strong brand name that it attracts investors, performers and customers from all over the country. This kind of economic activity is indeed differently organized when compared to that of industrial organizations. How, when and where t o work will be decided under very specific conditions.
Introduction It is widely recognized today that projects are a vital part of our industrial society, both as a tool for planning and as an organizational form. Although much of the project literature deals with aspects of planning and completion of projects without incorporating contextual dimensions, it is apparent that the environment poses a problem for projects. Lundin and Soderholm (1995) point out the need, during the project, to delimit or decouple the project from the environment in order to be able to complete it. Projects as defined by a time limit during which a specific delimited task should be accomplished by a certain group of people (Packendorff, 1993; Lundin & Soderholm, I yq 5 ) emphasize this desired separation from the environment. The separation and decoupling of projects from the environment may, however, be both difficult and undesirable, especially for inter-organizational innovation projects. Innovation projects are often dependent on information, knowledge, and resources that are not in the possession of a single firm (cf. Teece, ~ 9 8 0Jones ; & Smith, 1997). This dependency renders the decoupling of projects from their context difficult. Studies of project management have also demonstrated a lack of learning in projects (Ekstedt, Lundin, Soderholm & Wirdenius, 1999) that can be connected to decoupling
M A R I A BPNGTSSON .4KD JESSICA ERIKSSON
and separation. The ambition to decouple projects from other activities can contribute t o the difficulty of transferring knowledge and competencies developed in other projects or the environment into a new project. Many innovations are also strongly dependent on innovations and systems that are controlled by other firms (cf. Chesbrough & Teece, 1996; Shenhar, 2001). These systems are embedded in business relationships with customers, suppliers, competitors, and others (Granovetter, 1985: Gnyawali & Madhavan, zoor). The link and match between a specific innovation project and its embeddedness in competitive and cooperative relationships are therefore closely related to the organizing and success of projects (cf. Kreiner, ~ 9 9 5 ) . An innovation project must be linked to its context and such links develop if there is a flow of information, knowledge, and physical resources into and out of the project and context. This flow can be characterized by both "leakiness" and "stickiness" (cf. Szulanski, 1996; Brown & Duguid, 1998). An innovation project requires an easy flow or leakiness of relevant knowledge and resources into the project. Innovation projects also require prevention of a negative leakiness with an undesired flow of information, knowledge, and resources from the project to competitors. Stickiness is the opposite of leakiness and refers to mechanisms that hinder the flow. Stickiness is thus important t o protect new ideas and innovations from spreading to competitors, but if stickiness hinders the flow among partners in a project, the stickiness is negative for the project. In an inter-organizational project, there is, on the one hand, additional complexity in the flow of information, knowledge, and resources, as the participants have to accept a certain lack of control and run the risk of confronting opportunistic behavior by other firms. O n the other hand, inter-organizational networks are sometimes described as facilitators of innovation (Hamel, 1991; Teece & Pisano, 1994). The advantages of inter-organizational projects include the possibility of accomplishing a joint creation of knowledge or a joining together of complementary knowledge (cf. Hamel, 1991; Inkpen & Crossan, 1996). This possible contradiction suggests that the potential positive and negative effects of stickiness and leakiness in innovation projects are complex and require further elaboration. The purpose of this chapter is thus to discuss the contextual influence on inter-organizational innovation projects, by analyzing the stickiness and leakiness of knowledge, information, and resources. An
STICKINESS A N D LEAKINESS IN INTER-ORG4NIZATIONA1, INNOVATION PROJECTS
explorative analysis of four inter-organizational innovation projects in different contexts is conducted and propositions are made about the stickiness and leakiness in the different contexts.
Inter-organizational innovation projects Before turning to the main question posed in this chapter we must further elaborate on inter-organizational innovation projects, which is the unit of analysis in this study. Even if we focus on this specific type of project, its nature can vary. The problems related to flows and embeddedness in different cooperative and competitive relationships are related t o the nature of the project. Shenhar (2001)distinguishes between assembly projects dealing with single components, system projects dealing with a collection of interactive elements, and array projects dealing with a dispersed collection of systems. His distinction is similar t o an often-used distinction between innovations rather than projects; ( 1 ) autonomous innovations that can be pursued independently of other innovations, and ( 2 )systemic innovations that are dependent 011 other innovations (Chesbrough & Teece, 1996). The degree and type of embeddedness in relationships with customers and competitors can be assumed to differ anlong the different innovation projects mentioned. Autonomous innovations can he integrated with existing technology by the use of information and knowledge codified in industry standards. Systemic innovations require non-codified information and knowledge that is shared, coordinated, and adjusted within the entire product system. Autonomous innovations can be assumed to be easier to demarcate and decouple from other activities; whereas the system dependency inherent in systemic innovations makes them open t o influences from the environment. Furthermore, the nature of the project can vary during the innovation process, and the contextual influence can coilsequently vary. Bresman and Solve11 (1997) argue that the process of innovation consists of an initial phase with scanning or monitoring that provides information and ideas, a creative phase in which the generated pieces of information are combined in novel ways (cf. Schumpeter 1942), and a final phase of commercialization or implementation. What at one time or in one phase, is a more autonomous process may at another time or in another phase have greater systemic interdependency.
MARIA BENCTSSON AND J E S S I C A HRIKSSON
The leakiness and stickiness in different phases of an innovation process is related to the type of knowledge that is in use. Szulanski (1996) describes the difficulty of transferring non-codified and implicit knowledge as the stickiness of knowledge. Hansen (1999) distinguishes between simple and complex knowledge and argues that simple knowledge (explicit and independent) can be transferred in relationships with weak ties, as it is more leaky; whereas complex knowledge (implicit and system dependent) must be transferred in relationships with strong ties, as it is 'stickier'. We conclude that contextual influence may be of greater importance for systemic innovations and that both the character of the innovation and the contextual influence can vary over time. With that in mind, we turn to our main issue: the contextual influence on innovation projects.
Flows in different contexts of innovation projects Having stated that contextual influence can vary among different innovation projects, this section deals with different contexts and their possible effect on the flows of information, knowledge, and resources. The partners in an inter-organizational innovation project have relationships with customers, complementors, suppliers, and competitors, and these relationships influence and circumscribe the project (cf. Nalebuff & Brandenburger, 1996; Gnyawali & Madhavan, 2001).The leakiness and stickiness of flows in innovation projects embedded in different cooperative and competitive relationships can differ among contexts. Here, we focus on two interrelated contextual characteristics of importance for the flow of information knowledge and resources: the degree of certainty in networks, and the coordination and governance of the relationships. First, the degree of certainty in a business network is related to the proximity and understanding that exist among actors. Brown and Duguid (1998) stress that leakiness of knowledge is most pronounced in local environments or "communities of practice" anlong proximate organizations. Similarly, the proximity among competitors in innovative clusters, it is argued, enhances the flow of information, knowledge, and resources. (Porter 1990). A common history of interaction among actors makes it easier for competitors to monitor each other and redu-
STTCKINF,SS A N D 1,EAKINESS IN INTER-ORGANIZATIONAL INNOVATION PROJECTS
ces the time required to identify relevant counterparts with whom experiences and knowledge can be exchanged. A history of interaction can give rise to a common language that can be linked to a region or a specialist area of knowledge or practice. The development of a shared language and other codes of communication and interaction improve the fluidity of knowledge in all relationships. The local environment thus offers means of communication, social bonds, norms, values, and institutions (North 1990; Meyer & Scott 1992) that contribute to the certainty of the relationships. This certainty can add to the process of accumulated learning and ease creativity in an innovation project. Brown and Duguid (1998) argue that the leakiness is high when relationships among groups with similar practice and overlapping memberships are dense enough to facilitate the spread of knowledge. This is in line with Powell's (1998) argument that knowledge facilitates the utilization of greater knowledge as the capability to assimilate and use knowledge in the environment is embedded in routines and practices of projects, units or organizations. Brown and Duguid (1998) stress the stickiness of knowledge among units within an organization, and explain it with the indivisibility of practice and know-how. Knowledge develops through practice, and as different practices are separated through the division of labor, the knowledge becomes sticky. Similarly, if activities in business networks are decoupled, the division of knowledge may give rise to stickiness. Second, the degree of certainty in a business network is also related to the stability of a business network. In many industries, rapid and unpredictable change has led to a continuously changing competitive landscape (Eisenhardt &Martin, 2000) and to a growth of inter-organizational collaboration among firms (Powell, Koput & Smith-Doerr, ~ 9 9 6 )Powell, . Koput and Smith-Doerr (1996)argue that learning is, to a great extent, generated through cooperative ventures. In such fastpaced contexts, leakiness, it is argued, is high (cf. Abernathy & Clark, ~ 9 8 5Nagarajan ; & Mitchell, 1998). The context in which a project is embedded can also be stable. If strong ties develop among actors this contributes to the stability in the relationships surrounding a project (cf. Granovetter, 1985). Long-lasting relationships contribute to the stability, and such relationships can be found in the organizing of projects. It has for example been shown that some projects have permanent characteristics (Ekstedt, Lundin, Soderholm & Wirdenius, 1999). New projects are organized among
,MARIA BENGTSSON AND
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lESSlCA
ERIKSSON
the same partners, utilizing the same type of knowledge and involving the same individuals. Within the frame of such stable relationships there is leakiness (despite the noted lack of learning in projects), but only within the frames of the project. New information and knowledge is not obtained, as there is limited input from actors outside established relationships. Thus, the greater the overlap and similarities in technology and expertise shared by the partners in an innovation project and the stronger the ties ainong the partners, the more certain is the context for the partners. These bonds, common language, norms, and values, can enhance the flows of information, knowledge, and resources and increase stability in the networks. In contrast, the joining of two different technological fields in an innovation project, which is common in fastpaced industries, implies that the project is performed in a newly established context. Relationships in newly established networks arc characterized by uncertainty through a lack of expertise and common routines and practices. One can therefore assume that flows of information, knowledge, and resources in newly established contexts will differ from flows in well-established contexts. The second contextual dimension argued t o be of importance for the stickiness and leakiness of knowledge is the coordination and governance of business contexts. The coordination and governance of markets can be driven by both political and market forces and the strength of these forces can differ in different industries. An interventionist political discourse prevailed in Sweden during the 1930s to the 1g8os, especially in industries argued to be of importance for the welfare of the nation, such as many service industries. Political forces toward increased joint coordination and cooperation prevailed in these industries. Market forces dominated the coordination and governance of other industries, such as the manufacturing industry. In some industries these market forces steered toward concentration and a low intensity in competition whereas rivalry and intense competition prevailed in other industries. The political influence on industries changed during the 1990s and competition rather than cooperation became the recipe. However, different types of governance have impacted o n the structure of industries and the development of mental structures with the industries. Porac, Thomas and Baden-Fuller (1989) state that collective conceptions or mental models develop over time, affecting compctitive behavior. The different structures in the context supporting either
STICKINESS AND LEAKINESS IN I N T F R - O I I L A N I Z A T I O N ~ ~INNOVATION L PROJFCTS
cooperation or competition influence the leakiness and stickiness in contexts. Political interventions and institutionalized organizing forms arising from such interventions have historically supported collective actions, and their remains still exist, even though deregulation and a belief in market forces have been widely spread during the ~ g y o sIn . addition, trade associations and infrastructure providers are vital in some industries (cf. Melander, 1997) because they set rules that have consequences for the interaction within the business context and the organizing of single projects. Some industries are also characterized by extensive standardization efforts (Brunsson & Jacobsson, 2000) that can cause conformity on some aspects of innovation. Market forces are not related to political and institutional actions and interventions, but to the actions of competing firms within the network. Actual competition occurs in imperfect markets, which implies that business opportunities can be imperfectly exploited by companies within the industr y (Dickson 1992). These opportunities tend t o be constailtly challenged by market forces pushing toward increased competition. Competitors can be partners in one project and competitors in another, and the actors' roles can shift over time. Competitive advantages developed through innovations in the past cannot be sustained, because they are destroyed through new innovations. Firms in such industries need a constant development of new, independently unsustainable, competitive advantages (cf. D'Aveni, 1994; Hamel & Prahalad, 1994; Makadok, l y y 8). Competition is, however, not only rivalry. Easton and Arajou (1992) argue that relationships among competitors differ depending upon the competitors' motives for action and the distance among competitors. Distance can be related t o the degree of dependence, and competitors tend t o avoid rivalry if they are mutually dependent (Caves & Porter 1977). Easton and Arajou (1992) differentiate among five competitor relationships: cooperation, competition, conflict, co-existence, and collusion. In some contexts we can have relationships among competitors consisting merely of cooperation, and in other business contexts we can have relationships among competitors consisting merely of competition. The contextual influence and the flow of information knowledge and resources can be supposed to be different, depending on the type of relationships that exist among competitors. In this section two characteristics of the context assumed to affect
MARIA BENGTSSON A N D JESSICA ERIKSSON
the stickiness and leakiness of knowledge in inter-organizational innovation projects have been discussed. However, the contextual influence on the flow of information knowledge and resources is ambiguous, and the research presented focuses on contexts and organizations rather than on temporary inter-organizational projects. We will further study inter-organizational innovation projects in order to enhance our understanding of the contextual influence on projects in terms of the stickiness and leakiness of information, knowledge, and resources.
Four innovation projects and their contexts The contextual influence on the organizing of innovation projects will be illustrated through an analysis of four innovation projects in their respective contexts. As discussed earlier, the context consists of relationships with customers, complementors, suppliers and competitors. The clarity and stability in innovation clusters, as well as the governance supporting cooperation and competition was argued to affect the flows of information, knowledge, and resources. The cases studied represent well-established and newly established contexts, contexts in which political forces historically created governance structures supporting cooperation, and contexts were market forces created governance structures supporting competition. We have, therefore, used these dimensions to distinguish among four different contexts, as illustrated in Figure S:I. CERTAINTY OF THE BUSINESS CONTEXT Well-established
Newly established
The FMS Case
The Fiber-optic Loser System Case
The Recyclable Plastic Beer Bottle Case
The Pro Viva Case
'n+
$ 5 3+
Supporting competition
Figure J:I Contextual characteristics of the four cases.
88
STICKINESS AND LEAKINESS IN INTER-ORGANIZATIONAL INNOVATION PROlECTS
Well established with supporting competition The first innovation project is the development of a Flexible Manufacturing System (FMS), part of a new production line entailing a new combination of different technologies in a well-established context. The business context is the automobile manufacturing industry, in which market forces are pronounced in governance structures supporting competition. Competition among manufacturers affects the organizing of the project. The network system into which the innovation is to be implemented is well known and is characterized by the automobile company's selection of appropriate suppliers.
Newly established with supporting competition The second project concerns the development of fiber-optical laser systems. It resembles the FMS project in that the governance structures within the automobile industry influence the organizing of the project. It is also affected by the governance structure developed through interactions among global and local manufacturers of laser systems, also supporting competition. The project represents a newly established network created through the joining of two different technological fields. One of the two partners is a manufacturer of laser sources, whereas the other is a highly specialized manufacturer of fiber optics and laser systems. Furthermore the products are sold in a third field - to the automobile industry.
Well established with supporting cooperation The third innovation project, the development of a recyclable plastic bottle for beer, is organized within the context of the Swedish brewing industry. The industry is a traditional manufacturing industry and although it is undergoing change due to its opening for new manufacturing licenses and the EU membership, the case depicts a project in which the business context of customers and suppliers is common and well established. The project is strongly affected by firmly established and longstanding cooperation among competitors on distribution systems supported by political regulations.
M X K l A B t N G l S S O N AND TESSICA ERIKSSON
Newly established with supporting cooperation The final innovation project is the development of a fruit drink in a cooperation between a biotechnology firm and a dairy company. The innovation is the combination of two technological fields of knowledge, linking new technology and old markets. The Swedish Dairy industry is, like the brewery industry, undergoing de-institutionalization following deregulation. Still, the era of regulation has put decisive marks in the industr y and the project is performed in a context of prevailing, albeit weakened cooperation in the distribution among competitors.
Process development in an established production system The first project studied is the development of a Flexible Manufacturing System (FMS) for cutting and welding for AutoNova's new plant where the Volvo C 70 series was manufactured. AutoNova contracted a German firm, Carman, for the design and assembly of the production line, but Volvo and AutoNova decided which firms were to engage and co-operate within areas where new methods and equipment were to be examined. The development of the FMS was such a project. The FMS was used to cut holes in the coach to assemble the front suspension unit and the antenna and to weld the roof, the back, and the back shelf. Volvo had agreements with three robot manufacturers that had delivered robots for different plants: ABB Robotics, Kuka, and Prima. Kuka also designed production lines, and ABB was at the time expanding its business into assembly lines and these two firms were, therefore, competitors to Carman. For each installation Volvo compared the three manufacturers and chose the one that provided the best offer and technological solution at the time. Volvo contacted the Swedish firm, ABB Robotics. It was argued that the geographical proximity of Volvo to ABB and Permanova, the other partner in the project, was important for the project's efficiency. Volvo had conducted extensive research on laser technology, but not on ways of using and integrating the laser with other equipment. Volvo had earlier encouraged ABB to develop its business into this field. ABB responded to its request by developing a laser unit at the firm, but it
STICKINESS A N D LEAKINESS IN IXTEK-OKGANIZATIONAL lNNOVATlOK PROJECTS
did not measure up to standards and the unit was closed. AutoNova therefore contacted Permanova, known as a leading firm in fiber-optics (an important part of the robot laser system). The core competence of Permanova's unit for development of production systems was its ability t o design and integrate laser systems with very different technologies and products. Volvo had earlier worked with Permanova in several tests and experiments, and Permanova provided services for some of Volvo's laser equipment. Volvo and thus AutoNova knew that Permanova was able t o deliver service in a very short time. Rofin Sinar participated in the project, but AutoNova's contacts with Rofin Sinar were made through Permanova because it was smoother t o make Permanova responsible for the entire laser system. As a participant in the project, Permanova accepted responsibility for service and documentation of the installation, guaranteeing security and the running of the system. It was therefore necessary to learn about the entire production line and the other equipment used. AutoNova and the actors involved in other parts of the production line also needed to learn about the laser system and the FMS installation. Permanova therefore offered training programs and manuals on the systems they developed. ABB Robotics and Permanova's earlier interaction primarily consisted of the delivery of products in accordance with detailed specifications, but with limited joint development. The interaction between the two firms is however described as intense and extensive. Engineers from both firms came to know each other well through the project, which was seen as a prerequisite for more comprehensive cooperation. The involvement and cooperation between the firms and the risk that was associated with the interaction resulted in a formal cooperative agreement between the two partners defining their relationship. It was agreed that if ABB Robotics were to be involved in projects in which lasers were needed, Permanova should be approached; and if Permanova needed robots for laser systems, ABB Robotics should be contacted.
The development of fiber-optical laser systems A research and development project was established when Rofin Sinar, a German manufacturer of laser sources, and Permanova, a Swedish manufacturer of fiber-optics, decided to combine their efforts and devel-
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op lasers equipped with fiber-optics. The project concerned core technology of strategic importance for both firms, which implies that the interdependency between the firms was high. They had to work closely in the development, because the technology for laser source and fiber optics are intimately related. Initially the cooperation was problematic, as the firms had difficulties in knowing with whom t o communicate and how. To facilitate the desired co-operation, an engineer and one of the founders of Permanova spent half a year at Rofin Sinar working with the joint development. He developed a close relationship with engineers at Rofin Sinar, which was of importance for continued communication. Engineers from the two firms also traveled and met each other face to face several times. Certain routines for the communication concerning adjustments and development of the product were developed. Later in the process, co-operation between the firms rested on agreements of different kinds. Formal legal agreements were made through the use of cross-wise patents of the developed products: Permanova acquired patents for some parts and Rofin Sinar for others. Consequently, neither of the firms had proprietorship of the entire product, which reduced the risk of opportunistic behavior and increased the stability of the relationship. Agreements built on personal relations among individuals were also of importance for the project. Organizing within the project was not possible t o completely decouple from other activities, and thus was affected by the context of the two firms. Permanova's relationships with actors in other projects, such as Permanova's development of pre-designed production systems for the automobile industry, was a potential threat for the project. The customers within this industry are large, powerful firms that, to a considerable extent, can determine with whom Permanova should interact. For example, Permanova had developed a detector that can be used t o determine when the protective glass in front of the optical lens system is dirty and needs to be changed. Volkswagen wanted Permanova t o test the equipment in Volkswagen's production line, but decided that the equipment should be tested with a HAAS laser instead of a Rofin Sinar laser. In another case, Volvo chose t o install a Rofin Sinar laser and Permanova's fiber-optics for one production line. Two years later, however, a Trumph laser was chosen for another production line, meaning that Permanova was forced by its customers t o deliver fiber-optic systems or parts of the system t o Rofin Sinar's competitors.
STICKINESS AND LEAKINESS I N INTFR-ORGANIZATIONAL INNOVATION PROJECTS
Hence, Permanova's cooperation with Rofin Sinar was sometimes inconsistent with its cooperation with other actors in the value net. It was sometimes difficult to realize their two ideals: not to harm any relationship through actions undertaken by the firm and to fulfill all the demands of a specific project. Permanova chose to develop two different products for the same purpose in order to preserve its relationship with Rofin and its customer. It is difficult, however, to separate the development of products that are, in reality, almost identical. Rofin Sinar and Permanova therefore developed informal or implicit rules about how to interact with each other and with others in the value-net. These rules primarily stipulated that the two firms continuously inform each other about other projects and give the partner the opportunity to react if too much information and knowledge of importance for their cooperation is spread to other partners.
The development of a recyclable plastic beer bottle The development of a recyclable plastic beer bottle was a joint project between the small brewery Zeunerts and one of its suppliers and partowners, a manufacturer of bottles and production equipment. The part-owner manufactured other bottles for Zeunerts. It also produced bottle carriers and production equipment for Zeunerts and many other companies within the industry. Zeunerts had approximately I percent market share in an industry dominated by 4-5 companies accounting for more than 90 percent of the market shares. Still, Zeunerts acted more in competition with the larger breweries than with smaller breweries and microbreweries. The aim of the project was to develop a higher quality plastic bottle using the new materials; beer products could not be sold in the traditional soft drink PET-bottles, due to taste reduction and shorter shelf life. The project was motivated by a need for differentiation and a belief in creating environmentally-friendly products. The bottle manufacturer was described as an entrepreneur and a strong force behind the project. He used his knowledge of Zeunerts and his own network to create a new bottle. Concerns at this stage were primarily how to fit the product into the production system and how to fit it into Zeunerts's profile. There was limited need for transfer of knowledge between the two organizations, because the owner had ample access to the brewery
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and the production facilities. Due to the interrelated ownership structures, trust was pre-established, and was more important than any contracts governing the project. The entrepreneur emphasized the need for him to separate the development for Zeunerts from his production for competitors and the information he had concerning competing projects. The project was kept within the entrepreneur's organization so visitors to the brewery could not discover the development process. A similar product with different technical solutions was being developed in Denmark, and all Swedish breweries were monitoring the effects. The larger breweries seemed reluctant to introduce new bottles, because that always caused uncertainty within the existing systems for bottles and for recycling. These systems were coordinated by the trade association and related companies, which provided larger breweries with power in the development of and control over these systems. Swedish law demands that plastic bottles be part of a recycling system, and for a smaller brewery, that would find it costly to develop a separate system, it is important that its bottles be allowed into existing systems. At the final stage of the project, when the project was to have been launched, it became important for the part-owner that it be implemented and commercialized; he had invested his money and his commitment into the project. A political and competitive interaction process commenced. The industry did not accept the solution. They claimed that it threatened the entire existing system for the distribution of bottles and carriers because Zeunerts had developed a bottle that could not be used in the existing systems due to layers of different materials in the bottle. The limited leakage of information during earlier phases in the development may have contributed to the problems with commercialization that ensued. In earlier projects, Zeunerts had been able to market its solutions, but this time it had t o withdraw its bottle some time after the launch. The bottle had been introduced on a limited scale, and did not account for any larger sales at the time, but it was still a major setback. All the larger breweries and the Brewer's Association advocated a ban of the new bottle. After negotiations with the Swedish Environmental Protection Agency and representatives of the coordinators of the systems, Zeunerts was forced to modify its bottle so that it fit the existing recycling and distributions systems. At that time, the largest competitor, Pripps, had a similar product on the market that was compatible with existing systems. The industry's (and also the customers')
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resistance to competing systems and Zeunerts' failure t o settle this issue before implementation, lost Zeunerts its first-mover advantage. But, the negotiations concerning the Zeunerts case also made the conditions under which a plastic beer bottle could be introduced transparent. Other breweries soon had similar bottles.
The development of the fruit-drink, ProViva The ProViva innovation project in the dairy industry parallels the industry's development throughout the 1990s. Following deregulation and EU-membership, competition has increased and product development has become an important concern for dairies. Competition is most significant for products such as cheese, butter, and fruit yogurts that can be more easily transported than milk, and hence can be offered to a larger market. Despite increased competition, remnants of the regulations still affect the organizing of the industry. The earlier cooperation in distribution and the territorial division of the market implies that each dairy is still mainly responsible for distribution within its regional areas, i.e. the area from which producers deliver to a certain dairy. It is therefore crucial t o persuade other dairy companies to accept prestigious innovations into their own distribution, in order to reach a larger number of consumers. New products must be innovative and competitive in order to be accepted by competitors, which is necessary in order to meet the costly development of such products. The Swedish dairy company, Skinemejerier, chose t o adopt a network strategy for product development centered on a number of interorganizational projects. To this point, the most successful innovation project is the development and commercialization of the fruit drink, ProViva (a so-called Functional Food with qualities claimed t o be beneficial t o health). This project originated within the medical industry and was initiated by researchers from Lund, who formed the firm Probi. When the researchers developed their initial product, the bacterium, they looked for ways to implement it. Cooperation with Sk2nemejerier came about through personal contacts and recommendations. The R&D lnanager at Sklnemejerier was recommended t o consider this project; he trusted the expertise and knowledge of this particular group of researchers and decided that the project was worth pursuing. People at Skdnemejerier claimed that it was important that they had
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previously initiated a failed project with an oat-based product. Some of the sales managers still believed in oats and were therefore open to the new concept. The emerging norms within the industry toward more product development also contributed to acceptance of the project within Skinemejerier. After several attempts, an oat-based fruit drink was developed, and during the creation phase the project was gradually transferred into Skdnemejerier. Sksnemejerier's task was to ensure process production of sufficient quality. During this transfer, patents and formal agreements governed the rights to the bacterium (retained by Probi) on the one hand, and the exchange of knowledge and the rights to the finalized product on the other. This commercialization phase was predominantly a task for Skinemejerier, although Probi remained important in the launch into foreign markets and in contacts with the research community and the medical community. Here, Sksnemejerier needed to establish appropriate distribution channels. However, some dairies were initially reluctant to sell ProViva. For example, Sksnemejerier had to create alternative routes to stores in Arla's "territory" until Arla truly began to accept the product. Because biotechnology and Functional Foods are new areas, there is little knowledge about them. These types of products are restricted by test requirements and by marketing regulations (product-specific claims about positive health effects in advertising are not allowed). Probi provided research on Proviva's beneficial effects, conducted in Probi's medical network. Through alliances with physicians and researchers in medicine, the researchers behind ProViva explored the positive effects of the fruit drink, and contradicted the competitors' potential negative statements about its effects. Also, in the mid-~gqos,the researchers behind ProViva caused alarm over the possible hazardous effects of a competing Danish product launched in Sweden by Arla. Since this is a very new area, the general public must make up its own mind, a process that is often left to headlines and differing statements.
STICKINESS AND LEAKINESS IN INTER-ORGANIZATIONAI. INNOVATION PROJECTS
Contextual influence and flows in innovation projects All four projects presented in this chapter were inter-organizational, but the positive and negative leakiness and stickiness differed, depending on the context of the project. In this analysis, we elaborate on the stickiness and leakiness in the projects described earlier, in order to develop our understanding about the ways in which these different contextual dimensions affect the flow of information, knowledge, and other resources in innovation projects. The different contextual dimensions and the observed positive and negative stickiness and leakiness in each context are illustrated in Figure 5:2. The flow of knowledge changed with the phases of the projects. The numbers in the boxes illustrate the differences among the three phases: the initial phase, the creative phase, and the final phase. CERTAINTY
OF THE BUSINESS CONTEXT
Well-established
Newly established
1. Positive leakiness due to sociol
1. Negative stickiness due to
structures, functional systems and power positions 2. Negative stickiness of implicit knowledge and positive leakiness of explicit knowledge due to wellknown and separable tasks 3. Negative leakiness due to competitive plays and power positions
unawareness of role distribution and work practice and functional systems 2. Positive leakiness of implicit and explicit knowledge due to translators and access to networks 3. Negative leakiness due to competitive plays and power positions
1 . Positive leakiness due to social
1. Negative stickiness due to
structures, functional systems and power positions 2. Negative stickiness of implicit knowledge and positive leakiness of explicit knowledge due to wellknown and separable tasks 3. Negative stickiness and leakiness due to a pressure towards conformity and power positions
unawareness of role distribution and work practice and functional systems 2. Positive leakiness of implicit and explicit knowledge due to translators ond access to networks 3.Negative stickiness and leokiness due to a pressure towards conformity and power positions
Figure 5:z Observed differences in the stickiness and leakiness of information, knowledge and resources.
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T h e initial phase: Positive leakiness and negative stickiness A positive leakiness was observed during the initial phase in the two projects performed in a well-established technological context: the development of a FMS, and the development of recyclable plastic beer bottles. The leakiness in both projects was supported by social structures and larger functional systems that facilitated the establishment of the projects. In the FMS case, the initiators at Volvo had experience working with I ermanova and ABB in similar projects. Trust in the participants' technical capabilities was inherent in the relationship among project members from the three organizations. In the development of recyclable plastic beer bottles, the person initiating the project was working within both participating organizations. He was therefore familiar with the organizations and their employees. All participants in the project also considered the entrepreneur trustworthy. Hence, trust, experience, and social relationships seem to be important in explaining the leakiness of information, knowledge and resources in the initial phases of these two projects. Proposition I: In the initial phase of an innovation project, previous experience, familiarity, and trust between the initiator and the partner increase positive leakiness. J
The character of the systems that the innovations were dependent on or related to, and the stability of these systems, can also explain the initial leakiness. The context of the FMS project was stable. The firms involved had experience with the functional systems (i.e. production lines for car production) in which the FMS was to be implemented. This pre-existing functional system eased the flows of knowledge. Similarly, people involved in the development of beer bottles were cognizant of the production systems into which the product should fit. Thus, both projects were performed in stable and well-established technological systems that were familiar to the actors involved, which explain the leakiness in the initial phase. The power structure in both cases contributed to the certainty and stability. The entrepreneur in the recyclable beer bottles project and Volvo in the FMS project had the power to initiate and design the projects. The entrepreneur derived his power position from being a part owner of Zeunerts and Volvo had its power position as a large and important customer.
STICKINESS AND LEAKINESS IN I N T E R-O R G A N I Z A T I O N A L INNOVATION PROJECTS
Proposition 2: In the initial phase of an innovation project, the existence of ( a ) well-known functional systems and (b) an actor with a strong power position increase positive leakiness. In the other two cases, initial negative stickiness was observed. The negative stickiness can be explained by the lack of an established context for the project. In both the development of fiber-optical laser systems, and the development of the fruit drink ProViva, two different fields of tech~lologywere integrated. The joining of two technological fields added complexity to the interaction among project participants. The possible contribution of the knowledge provided by the other party was difficult to evaluate and the flow of information between the parties was often hindered. In the fiber-optic case, the geographical distance between the two firms added to the difficulties perceived. The initial difficulties in the ProViva project were easier to solve, due to the geographical proximity between the partners. Differences in and unawareness of the role distribution and work practice of its partners can explain the negative stickiness during the initial face in the two projects. Lack of earlier experience and established relationships among participants contributed t o the unawareness. To give an example, Permanova communicated with the people who were considered to be the most knowledgeable members of the Rofin staff. The Permanova staff also believed that the information and knowledge they provided would be incorporated into the design of parts in the joint product. When it turned out that the information was not used, the interpretation was that the partner firm was ignorant, and the relationship was, of course, harmed. Communication was ineffective, and gave rise t o misinformation causing anxiety and mistrust, making the process sticky. Proposition 3: In the initial phase of an innovation project differences among technological fields, lack of experience and lack of established relationships hamper communication and lead t o misinformation and mistrust, which in turn gives rise t o negative stickiness. Neither of the two projects was organized within the frame of one functional system. Instead, several technological fields and adhering functional systems needed to be matched. Furthermore, the high technology involved was characterized by change and uncertainty. The participants in the projects lacked knowledge of their partners' functional
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systems. Ideas developed in the biotechnology had to be adjusted to food regulations and t o the production process within the dairy industry. Problems occurred when high-technology components were to be used in new products manufactured in existing process production and distribution systems. Similarly, ideas and knowledge about fiber optics had to he adjusted to the production, construction, and use of lasers. The projects were dependent on different functional systems, but there were few people with knowledge about all the systems involved. This lack of knowledge and instability contributed to negative stickiness. Proposition 4: In the initial phase of an innovation project, lack of knowledge about all functional systems involved gives rise to negative stickiness.
The creative phase: Positive and negative leakiness and stickiness In the creative phase, the partners had overcome initial obstacles and worked together with the actual development of the innovation. Positive leakiness was observed in all four cases, but a difference can be noted between innovation projects in more or less established contexts. A leakiness of implicit knowledge developed only in projects within newly established contexts, whereas negative stickiness of implicit knowledge developed in projects within well-established contexts. In both the FMS project and the plastic beer bottle project, standardized and codified information leaked into the project. Permanova and ABB Robotics developed the fiber-optical system and the robot within the frame of their respective organization and adjoining networks without mediating the knowledge creation to each other or to Volvo. By dividing the project into subprojects, the partners were freed from the need to gain intimate knowledge about each other's development. To make the integration of different technologies in the FMS possible and to make the system work in the production line, knowledge about the subsystems was documented. The suppliers developed instruction manuals and courses to increase the leakiness of explicit knowledge about the systems into the project. Similarly the plastic beer bottle project was confined to one of the partner organizations. In this case, the knowledge was so specialized
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that Zeunerts had limited interest in gaining technical knowledge from the project, and had limited technological competence to contribute to the project. Because the actual creation of the technological solution took place in both cases at each partner's site, the transferred knowledge was codified, explicit knowledge. Implicit knowledge that could be of importance to success was, however, never translated into the projects as a whole. This lack created problems in the final phase of the project when the innovation was to be commercialized. From the perspective of the entire project, not only the creative phase, the stickiness of implicit knowledge must be described as negative, even though it provided efficiency in the creation of the solution. Proposition 5 : In the creative phase of an innovation project, it is possible to divide the project into several subprojects that (a) give rise to negative stickiness of implicit knowledge and (b)foster codification of knowledge and a positive leakiness of explicit knowledge. The other two projects - the fiber-optic project and the ProViva project - were performed in newly established contexts and the projects were mainly characterized by positive leakiness of implicit knowledge into the projects. The knowledge provided was experimental rather than standardized. The flow of implicit knowledge was possible due to the presence of a translator who understood both parties and mediated knowledge among the involved firms into the project. A two-way translation of work practice, functional systems, routines, and norms that prevailed in each technological field made the leakiness of implicit knowledge possible. In the Fiber-optic case, an engineer from Permanova spent six month at Rofin Sinar. Through his interaction with their technicians, an understanding of the functional systems and routines was received. With this knowledge, he was able to initiate his colleagues at Permanova into the functional systems of Rofin and to mediate knowledge about routines of Permanova to Rofin. It was thereby possible to develop shared routines and agreements about the continued flow of information, knowledge, and resources between the two different technological fields. In the ProViva case, the R&D manager at Skinemejerier, having knowledge of both the scientific community and the functional systems of Skinemejerier, helped to mediate the two knowledge systems into the respective organizations.
MARIA BENGTSSON AND JESSICA ERIKSSON
The interaction between the partners also gave access to a broader scientific community, as different technological fields were incorporated in thc project. The partners were willing to mediate knowledge developed through the organizations' interaction within their respective local network, which included both the scientific community and suppliers. Both partners contributed to the leakiness of knowledge by translating the working practices in their respective local environments. The knowledge generated in these environments was then shared and utilized in the joint project. Proposition 6: In the creative phase of an innovation project, (a) a translator of practices contributes t o positive leakiness of explicit and implicit knowledge and ( b ) the emergence of shared practices gives access to a broader scientific community.
T h e final phase: Negative leakiness and stickiness As the projects progressed toward the final phase, market conditions and the actions of competitors became pertinent for the projects and their completion. During the iinplementation and commercialization of the innovations, a positive leakiness as well as a positive stickiness of information and knowledge were important. The FMS project and the fiber-optic project were organized in a business context with structural conditions supporting competition and providing a potential for negative leakiness. The car producers argued that a continuous exchange of suppliers and partners over time was necessary. It was argued, for example, that different firms lead the development of lasers at different times, and that it is important to choose the best solution at the time. It is also held that suppliers are continuously played against each other when alternatives are compared, an advantageous situation for the car manufacturers, which gave rise t o negative leakiness in the FMS project. The car manufacturers' actions were also of importance for the fiber-optic project, as the innovation, a new fiber-optical laser system, was to be sold to customers in the automobile industry. In the FMS project, Volvo had previously cooperated with competitors of the participating organizations, ABB Robotics and Permanova. They mediated previously gained knowledge to the partners in this specific project. If Volvo changes partners again in the future, knowledge
STICKINESS AND LEAKINESS IN INTER-ORG.4NIZATIONAL INNOVATION P R O J E ( ' T S
that the firms have shared with the car manufacturer can be transferred t o competitors. The fiber-optic project was embedded in the same competitive context and exposed to the "playing" of suppliers in the automobile industry. Another dimension was of importance in this case: Volvo's power position as a large customer, which allowed it t o force Permanova into interaction with Rofin Sinar's competitors, and vice versa. Rofin Sinar considered it t o be a problem when Permanova utilized knowledge gained from their mutual project in cooperation with other laser source manufacturers. The negative leakiness of knowledge in the fiber-optics project could render further commercialization of the innovation more difficult and harm the relationship between Permanova and Rofin Sinar. In order to secure their relationship and t o avoid negative leakiness, the firms initiated new innovation projects that might provide benefits from negative leakiness in order t o stay ahead of the competitors. Proposition 7 : In the final phase of an innovation project, ( a )continuous exchanges of partners and ( b ) actors' power positions can give rise to negative leakiness. The plastic beer bottle project and the ProViva project were organized in a business context with structural conditions supporting cooperation. The dairy and the brewery industries were heavily influenced by political decisions, old patterns of interaction, and systems for distributing goods. Despite a deregulation, some conditions that arose during the regulative era remained, albeit weakened, in the dairy industry. A number of different systems were entwined in both industries, particularly in the brewery industry. The cooperation within the brewery industry indicated that the dependency among competitors, the trade association, and customers was complex, which strongly circumscribed Zeunerts's ability t o act. Resistance from the customers - political as well as industry pressures to conform and not to challenge the system - hampered positive leakiness (negative stickiness) when the plastic beer bottle innovation was to be commercialized. The power positions of some breweries were also of importance. Larger breweries that strongly influenced the distribution system were not keen to accept a new plastic beer bottle that proved t o be totally incompatible with the existing systems. Instead, the leakiness from the project became negative. When the bottle was introduced and then stopped, knowledge about the technical solution, as
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well as the attempt to adjust the bottle to the existing system, were open for competitors to copy. In the dairy industry, Skinemejerier had to sell ProViva through the channels of its competitors, because all dairies remained as distributors of dairy products to the grocery stores in the respective regional area. For the commercialization, Skinemejerier was dependent on cooperation with its competitors. Some of the other dairies whose regional distribution placed them in power positions, hesitated to sell ProViva, perceiving the product t o be a threat. It was thereby possible to hamper positive leakiness from the project in the final phase. Proposition 8: In the final phase of an innovation project, established and enduring cooperation enhanced by significant actors' power positions or supported by rules and regulations fosters conformity, which gives rise to (a) negative stickiness and (b) to negative leakiness, if competitors can capitalize on the knowledge provided.
Discussion In our analysis of the four inter-organizational innovation projects, the phases have emerged as important in understanding contextual influence on projects. A certain context can have a positive effect on stickiness and leakiness during one phase, but the same context can have a negative influence on the project in other phases. First, we have found that a well-established context contributes to the necessary leakiness of information, knowledge, and resources during the initial phase. In well-established innovation contexts there are familiarity, experiences, and supporting systems that allow for efficient communication. This reasoning is in line with Bounty (zooo), who argues that strategic resources and intellectual capital leak among R&D scientists across organizational boundaries if acquaintance and mutual trust develop among the interacting individuals. In well-known contexts, actors who have previously interacted with each other and have good "chemistry" form strong relationships (c.f. Larsson, Bengtsson, Henriksson, & Sparks, 1999). Thus Larsson, Bengtsson, Henriksson, and Sparks, (1999) argue for the need of a communicative capacity to increase the ability to disclose knowledge to other organizations. A communicative capacity includes routines and systems for communication, and such routines and systems exist in well-established contexts.
STICKINESS AND LEAKINESS IN INTER-ORGANIZATIONAL INNOVATION PROJECTS
Second, we can conclude that such a communicative capacity does not exist in newly established contexts, which give rise to a negative stickiness in the initial phase. Because no common language or other communicative means exist, communication is ineffective in the initial phase. In accordance with Bresman, Birkinshaw, and Nobel (1999) we argue that misinformation can cause anxiety and mistrust, which makes the flow sticky. Lack of familiarity in newly established contexts can be the result of differences among technological fields as well as cultural and geographical distances. Larsson, Bengtsson, Henriksson, and Sparks (1999) state that geographical distance and its expression in the social context including foreign languages, customs, and tradition disturb communication among partners. We argue that distance can also be valid for partners from different technological spaces, implying, for example, that the distance between Rofin and Permanova, being both geographical and technological, was doubled, which made the communication difficult during the initial phase (cf. Bengtsson & Soderholm, 2002). Third, our study indicates that the initial positive leakiness in wellestablished contexts becomes negative in the creative phase, and that the negative stickiness in newly established context shifts and becomes positive during this phase. Familiarity, experiences, and supporting systems in well-established contexts allow efficient communication of explicit knowledge. Zander and Kougut (1995) found that knowledge that can be coded and taught is possible to transfer rapidly. This reasoning is in line with that of Schulz (ZOOI), who demonstrated that the fluidity of knowledge increases if it is codified, rendering the innovation process relatively simple, even though the solutions may be technologically advanced, because there is limited need for learning among the organizations. As the projects were broken down into subprojects, a so-called learning substitution occurred, in which a certain group within a project frees a partner organization from the responsibility of having to learn about a certain area (c.f. Levinthal & March, 1993). This situation, however, gives rise to a negative stickiness in the flow of implicit knowledge, which is akin to Powell's (1998) statement that knowledge facilitates the utilization of greater knowledge, and Brown and Duguid's (1998) reasoning o n the stickiness of knowledge among units due to division of practice. In contrast, leakiness of implicit knowledge developed in newly established contexts during the creative phase. One explanation for the
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leakiness was the existence of a translator. Cohen and Levinthal (1990) argue for the need t o have a person monitoring the environment, identifying the knowledge needed, and translating it into the different units within an organization (cf. also Szulanski, 1996). We argue that this absorptive capacity (Cohen & Levinthal, 1990) is needed for the flow of information, knowledge, and ideas among partners in an inter-organizational project. This reasoning is in line with Inkpen's (1998) argument that cross-boarder knowledge transfer often requires personnel transfers, visits, and face-to-face contact in order t o overcome the complexity and distance. Intimate knowledge about the partner appears t o be of importance, following Uzzi's (1997) discussion, as such knowledge can allow for better understanding of the partner's problems and therefore contribute to better solutions. Furthermore, interaction among partners in inter-organizational projects gives access t o a broader scientific community and scientific progress that otherwise would have been beyond the reach of the firms (c.f. Kreiner & Schultz, 1993; Liebeskind, Lumerman, Zucker, & Brewer, 1996). In newly created innovation contexts, there are many sources of knowledge, physical assets, human resources, and information, and thus many sources for potential leakiness that contribute positively to the combination of knowledge in novel ways. In order to combine knowledge in novel ways, there is a need for a transfer of practices that can be obtained if actors simultaneously participate in several communities of practices, and thus contribute to the evolving of overlapping routines. The development of routines and common practices can be similar to Goes and Park's (1997) finding that administrative links in inter-organizational relations accelerate learning and prevent mistakes. Fourth, cooperative and competitive governance structures in the market cause both stickiness and leakiness in the third phase. Politically induced cooperative structures contribute to a negative stickiness that makes the introduction of new solutions and innovations difficult. Cooperative contexts with formalized routines and shared systems become "barren", to paraphrase Szulanski's (1996) reference t o an inability in such contexts t o accept new knowledge and ideas. This barrenness is akin to Uzzi's (1997) discussion of the ways in which "overembeddedness" may hinder actions in networks when social norms becomc overly important. Forces toward conformity hinder the implementation of new innovations, because they are perceived as breaches
STICKINESS AND LEAKINESS I N INI'EK-ORGANIZATIOKAL INNOVATION PROJF.C:TS
against shared norms and accepted behavior (c.f. Gnyawali & Madhavan, 2001).The familiarity and integration among competitors makes it easy to gain knowledge rapidly about new ideas and to adapt them t o the rules and norms that prevail. Hence, negative leakiness also is present in the context. Competitive governance structures in the market also cause negative leakiness in the final phase. Gnyawali and Madhavan (2001) suggest that dense networks are characterized by increased fluidity of resources. Dense networks will cause increased structural similarities among potential competitors, making conflict avoidance more difficult and being expressed as negative leakiness. If there are dynamic competitive relations pressuring the firms, they could provide an increased flow of resources from a project considered to be positive within the industry, and contribute to learning in a wider context. From the point of view of the firm contributing knowledge, it may he negative leakiness, but it stimulates further innovativeness. However, if the knowledge generated within the projects and their value-nets are implicit, the knowledge translated into the project context also provides the project with some degree of stickiness, hindering the leakage of knowledge into the extended network (c.f. Schulz & Jobe, 2001). Our analysis has focused on contextual influence on the flows of information, knowledge, and resources in inter-organizational projects. From our analysis some propositions about the flows have been generated, and some tentative conclusions have been discussed. Based on this discussion, we can conclude that the contexts of projects matter, and that the contextual influence may vary during the course of the project. A more distinct definition of different types of flows in innovation projccts is needed, however (see e.g. Zander & Kogut's [19951 definition of knowledge as one attempt to do this). This study also demonstrates that the embeddedness in cooperative and competitive relationships must be acknowledged and further developed.
Increasingly, a characteristic of many project organizations is the move toward developing strategic alliances and partnering arrangements with other ~roject-basedorganizations. Examples of such working partnerships are ubiquitous, ranging from the multi-partner consortia working to construct Hong Kong's Chek Lap Kok airport, the Three Gorges Dam in China, develop the latest generation Airbus model A380 in Europe, and advance innovative wireless applications in communications. Although the reasons for promoting such relationships are numerous, including risk management, economies of scale, and so forth, little is known about the motivations promoting the push toward such alliances, the mechanisms by which these alliances are propagated and reinforced, and the outcomes of cooperative relationships. This chapter will develop a framework for analyzing the nature of interorganizational cooperation, particularly as it applies to information sharing across organizational boundaries. Using case study examples from recently initiated information sharing initiatives for planning and development projects within the United States, we will examine the nature
' Portions of this chapter were adapted from Nedovic-Budic, Z. and J.K.
Pinto, (r99y),"Interorganizational GIS: Issues and prospects," A n m k of Regional Science, 33, 183-195. This research was supported by NSF Grants ILS - y81z5zo and IRI - 9630634.
I N F O R M A T I O N SHARING A M O N G PARTNERING PROJECT ORGANIZATIONS
of cross-organizational cooperation and propose a conceptual model of multi-partner project information sharing that can serve as an initial point into investigating methods for promoting and improving such collaborations in the future.
Benefits of information sharing There are a number of reasons why independent organizations actively seek to develop collaborative working relationships with other projectbased firms (Ekstedt, Lundin, Soderholm, & Wirdenius, 1999; Lundin, 2000). Although some reasons are obvious (e.g., the desire to make use of the technical expertise or capital reserves of other organizations that can offset a particular short-coming), other reasons are not so clear. For example, long-term competitors may be called upon at times to collaborate in a project of mutual interest; the best recent example may be the partnership between Rolls-Royce and General Electric's Jet Engine Groups in developing the engine systems for the U.S. Government's Joint Strike Fighter program. In these circumstances, competitors are placed in the unique position of having t o cooperate, provide each other with potentially valuable intellectual capital and technical data, and work jointly to create a project of which they both have direct ownership. Hence, the process of information sharing and cooperation across organizational boundaries may, at times, make perfect sense while at other times appear counter-productive or, at least, potentially damaging t o long-term competitive advantage. What then, are some of the primary motivations project-based organizations may feel that impel them toward interorganizational cooperation? Risk Sharing - One of the key risk mitigation strategies for firms engaged in projects fraught with high uncertainty is t o determine if it is possible t o either transfer or, at a minimum, share risk (Chapman & Ward, 1997). Risk, of course, can encompass a number of forms, including financial risk, technical risk, and managerial risk. Essentially, however, risk refers t o methods for addressing, understanding, and minimizing the negative effects of project uncertainty. In this manner, sharing risk represents a strong motivation for interorganizational cooperation and data sharing. Economic - A number of industries have huge economic barriers to entry due to the cost of initial start-up. The commercial airframe
JEFFREY K . P I N T O AND Z O R I C A NEDOVIC-BUDIC
industry, for example, is one with such high financial barriers that the European consortium that formed Airbus needed active and liberal funding from member countries to first incubate and eventually create a viable competitor t o Boeing/McDonnell-Douglas. Technical - As project organizations often specialize in specific engineering functions or technical operations, a project that requires multiple forms of technological innovation is usually simply beyond the capabilities of any one organization. Firms, then, will routinely engage in joint partnerships with other technical organizations to gain their expertise, offset their own limitations, and present the client with a stronger proposal, based o n the ability to offer a full range of services. From a product perspective, Ford Motor Company has maintained a long-term link with Mazda of Japan, t o the point of acquiring a minority stake in the company. Ford gains the superior aluminum, smallblock engines that Mazda produces and Mazda benefits through Ford's excellent car body integrity. Strategic - Another important motivator for interorganizational collaboration refers to the need t o create strategic alliances (Lundin & Hartman, zooob). There are any number of reasons why such alliances are beneficial, including the opportunity to penetrate previously closed businesses, industries, or even countries, the advantage of gaining technical benefits from the partner, and the effect of synergies through the linking of organizations internationally. For example, many western project firms seeking to gain infrastructure projects in countries that have historically been difficult to penetrate, such as China or India, will routinely partner with local companies as a necessary first step to gaining access to these foreign markets. General Electric first sought to penetrate the market to supply jet engines to Airbus through developing a strategic partnership with SNECMA, the French engine manufacturer. In sum, there are a number of practical reasons why project organizations may seriously consider interorganizational collaboration and information sharing, even with potential rivals. In developing a model of the motivations and mechanisms for such information sharing across project organizations, the balance of this chapter will draw directly from the authors' recent research investigating interorganizational information sharing within the context of IS projects. Obvious parallels can be drawn between this form of project and other cases in which there is strong incentive for project firms to collaborate. It is useful, before proceeding too far into this discussion, to briefly
INFORAlATTOU S H 4 R I N C ; A M O N G PARTNERINC P R O J E C T O R G A N I Z A T I O N S
define the idea behind the term "collaboration." Due to the inherent similarities among terms such as collaboration, cooperation, coordination, and integration, the concepts are often used interchangeably and indeed, in our discussion, we will at times substitute one term for another. Nevertheless, the underlying nature of the construct is t o suggest joint behavior toward some common goal of interest. This definition comes from Pinto, Pinto & Prescott (1993) who synthesized the work done by multiple authors employing these varying terms. Their findings suggested that regardless of the terminology used, their implicit nature essentially illuminated the same underlying construct.
The potential for information sharing In theory, coordinating information sharing among organizational project partners offers notable advantages through cost savings, productivity, improved decision making, and better customer service (Brown & Brudney, 1993; Dawes, 1996). Dueker & Vrana (1995) identify efficiency (existing operations performed at lower per-unit cost), effectiveness (enhanced capabilities, new or better quality products), and enterprise benefits (new responsibilities, broader mission) as potential gains from information sharing. The effects on problem solving, decisionmaking, and better understanding of technical issues are perceived as the most valuable effects of data sharing. Finally, coordinated crossorganizational project teams hold the promise of stimulating interorganizational cooperation and collaboration, and building inter-organizational alliances and relationships (Kumar & van Dissel, 1996). The overall succcss of each organization can be improved dramatically by sharing information between them. Given the potential benefits, however, information-sharing arrangements to date offer a mixed result. While some partnerships have been fruitful and profitable t o all parties involved, in other cases a general unwillingness t o actively collaborate or share proprietary information across organizational boundaries has led t o less than optimal project performance. Such lack of sharing impedes the optimal developillent of projects in specific cases (Pinto & Onsurd, 1995), and also hinders the development and utilization of a project technology's full potential (Frank, 1992). The impediments to sharing are of both a technological and organizational nature, with the latter often being
J E F F R E Y K. P I N T O A N D Z O R I C A N E O O V I C - B l l D I C
harder t o overcome. Campbell (1991) points out the following problem areas: (a) variations in priorities between participants; (b) differences in the ability t o exploit technical issues; (c) differences in the level of awareness and technical skills; and (d) inability t o achieve agreements over access to information, leadership, sharing protocols, equipment and training. Masser and Campbell ( ~ 9 9 5further ) concluded that "organizational and political factors apparently offset in many instances the theoretical benefits to be obtained from structures which seek t o promote information sharing" (p. 247). Thus, while few might argue that, in broad terms, information sharing is both necessary and useful t o collaborating project firms, there are a number of barriers that negatively affect the ready flow of necessary information among partner firms. This chapter proceeds with a discussion of some of the major issues that affect the deliberate strategy of coordinating information sharing among industrial partners in project settings.
Challenges and dynamics of data sharing In order to promote sharing across project organizations, it is of ultimate importance to understand the motivation that drives various firms t o engage in inter-organizational relationships. Although the organization's structural characteristics are often the primary determinant of the amount and elements of interorganizational interaction (Levine & White 1961), cost savings is probably the most common reason for seeking relationships across organizational boundaries. This is particularly true in times of increased fiscal pressures on organizations and resource scarcity (Pinto & Onsrud, 1995). While the economic arguments are the most compelling, Kumar & van Dissel (1996) argue the importance of technical and socio-political elements in explaining collaborative alliances. In addition t o cost, the partnerships are motivated by organizational needs and capabilities, creating synergies, and appeals to professionalism and common goals (Obermeyer, 199s). The commonly held or "superordinate" goals which are important for all involved organizations, but are hard to achieve independently, are also put forth by Tjosvold (1988) and by Pinto, Pinto & Prescott (1993) as one of the most prominent reasons for information sharing. Coordination in general can also be based on authority (deriving from a sense of duty); common interest (valuing the
INFORMATION S H A K I N G A M O N G I'AKTNERING PROJECT ORGANIZATIONS
same goals); or exchange (receiving something in return) inducements (O'Toole & Montjoy, 1984). Nevertheless, spontaneous interorganizational coordination is rare and monetary or other incentives may be necessary t o "push" or "pull" the organizations into the sharing relationship (Azad & Wiggins, 199s). Such coordination among various organizations is recognized as a necessary ingredient in attaining a goal of common interest (Lundin & Soderholm, 1995). "Coordination consists of protocols, tasks, and decision mechanisms designed to achieve concerted actions between interdependent units" (Thompson, 1967; Kumar & van Dissel, 1996, p. 284) and assumes benefits accrue t o all involved parties (Cook, 1977). Project implementation in multi-participant settings is a complex process that confronts diverse organizational functions, tasks, resources, motifs, interests, and goals. The process involves continuous discussion and agreement over the joint activities. The success of forming an inter-organizational relationship primarily depends on the participants' willingness to negotiate and compromise, on establishing the relationship of trust (Hartman, zooo), general quality of the relationship (Pinto & Onsrud, 1 9 9 5 ) ~and on their commitment t o sharing ) . good teamwork, facilitated by proper (Meredith, ~ 9 9 ~Interestingly, communication channels, is seen t o be even more beneficial for interorganizational dynamics than having good leadership (Evans, 1995). Organizations entering into an inter-organizational relationship have to build a level of mutual understanding. Communication between organizations is a critical factor in enabling sharing partnerships. Harvey (1996) promotes a concept of boundary objects as successful for designing information systems in heterogeneous cultural settings. According to this author, successful communication between different participants starts with clarifying the semantic differences and commonalties, and then proceeds with negotiated construction of coherence between the groups. Finally, there is some indication that the success of coordination depends on the number of participants involved. Greater numbers of participants entering a partnership diminishes the likelihood of success (Brown et al., 1996). Alternatively, however, according to Azad & Wiggins (1995), a critical mass of participants is required t o build momentum for establishing and reinforcing the processes necessary t o exchange information steadily, rather than sporadically. The presence of a skilled leader, support from managers, and administrative officials
J E P r R E Y K. P I X T O A N D Z O R I C A N E D O V I C - B U D l C
are seen as essential in the maintenance of such an interorganizational relationship (Sabatier & Mazmanian, 1981; O'Toole & Montjoy, 1984). Highlighting the above discussion, a number of diverse challenges must be addressed and, where possible, resolved prior to creating an environment that is conducive to freely sharing information across organizational boundaries. Among the challenges that must be considered are: 1)the impact of organizational factors, 2 ) the need for data standardization, 3) the cost of information collection, storage, and dissemination, and 4 ) the importance of creating mechanisms for interorganizational information exchange. Each of these challenges will be considered in turn.
Challenge one: The effect of organizational factors Entering an interorganizational project relationship leads t o increased interdependence among the organizations. Organizations engaging in a sharing arrangement have to be prepared to undergo modifications and adapt to the situation. Primarily, they should be ready t o forgo some autonomy while entering an inter-organizational relationship (Azad & Wiggins, 1995). The authors found that the extent t o which the organizational autonomy is affected determines the probability of establishing the relationship. For example, in some instances, officials tend to form relationships that would least affect their autonomy, thus minimizing their loss of power (Cook, 1977). In effect, they seek a collaboration of the lowest level; that is, one in name only with little supporting behavior. O n the other hand, a pre-existing state of organizational interdependence is said t o favor inter-organizational sharing (Meredith, 199s). Therefore, organizations that by their very operations require a collaborative environment to implement projects are more likely to continue t o engage in sharing activities as a matter of course. For example, in soliciting bids for large (multi-billion dollar) defense-related contracts, governments often start with the expectation that reasonable bids must involve a consortium of partnering organizations. Additionally, with the rapid increase in the use of external suppliers and project supply chain management, many project organizations contract with numerous other partners as a matter of course. This in-creased interdependence and need for cooperation can in many situations lead to power shifts (Stern & Craig, 1971), "turf" (Dawes, 1996), and con-
INbOI1MATION SHAKING A M O N G PARTNERING PROJECT ORGANIZATIONS
flicts (Kumar & van Dissel, 1996) over authority, jurisdiction, and distribution of power. Various organizational and environmental factors affect inter-organizational exchange. Those include: stability of the environment; homogeneity of organizations; concentration of resources; resource capacity, domain consensus among the organization, turbulence1 change, and mutability of organizations in the environment (Cummings 1980). Organizational connectivity is also related t o organizational internal factors such as: centrality, formalization, complexity, and intensity (i.e., frequency of information flows and amount of resources shared; Van de Ven and Ferry, 1980; Brown & Brudney, 1993).Calkins et al., ( 7 9 9 ~present ) five organizational factors that could impact the decision t o institute standards for data sharing: bureaucratic practices and standard operating procedures; degree of cross-functional cooperation; organizational structure; political environment; and corporate culture. Another factor is the project capacity of the organization, which refers to "an overall index that measures the proficiency, and effectiveness of conducting a series of implementation tasks" (Brown & Brudney, 1993). The change and adaptation that an organization has t o go through is yet another vital issue in the sharing process. This feature is particularly relevant for project firms that are contemplating engaging in interorganizational exchanges for the first time. Any information sharing effort will involve redefinition of existing tasks and structures and the establishment of new ones. Institutional inertia and resistance to change are a common reaction to innovations (Newton et al., 1992; Craig, 1995). Mcrcdith (1993) identifies ambiguity and complexity as causes of the organizational resistance t o change and cooperation. The resistance to structural changes and institutional inertia, however, tend to diminish as the expected benefits increase (Dueker & Vrana, 1995).
Challenge two: The need for information standardization In information exchange, it is vital that data standards be agreed upon as soon as possible in that these standards often describe the practical mechanics of the information sharing process. Standards are necessary for data models, content data, feature delineation, data collection, refer-
J E F F R E Y K . I'LNTO A N D Z O R I C A NPDOVIC-BUDIC
encing, data quality, data transfer and use (Guptill, 1994). The need for standards increases with the data sharing activities as they become necessary for determining the fitness of data for different users (Rushton & Frank, 199s). Therefore, setting standards to facilitate sharing has been widely acknowledged as a critical activity that can reduce the costs of sharing data (Moyer & Niemann, r q q j ; Bossler, 1995). Interorganizational systems may require standards on project information of a wide variety of types, including planning data (PERT charts, Risk assessment and abatement procedures, Scope analyses, and WBS) as well as control documentation (Earned Value Analysis and Configuration Management). The key lies in creating a data standard that allows all parties to correctly interpret status reports, updates, and other pertinent information.
Challenge three: Information costs Sharing information across organizations involves costs incurred t o coordinate the effort, to negotiate, and t o develop the common information database standards. Sharing the costs, not only for project development, but also for database development is the most obvious advantage of interorganizational cooperation. It is important t o note, however, that the "costs" associated with information sharing come in many forms, only one of which is applied t o monetary costs. Information sharing and coordinating project activities lead to "administrative costs" as well (Dawes, 1996). Transaction costs are among these administrative expenses, which "are the costs of managing the interaction while keeping the opportunistic behavior under control so that ongoing operation between the units can be sustained" (Kumar & van Dissel, 1996, p. 283). Due to the transaction costs and delays caused by the coordination process (Brown et al., 1996), the costs of sharing information, both in monetary and administrative terms, may be significant. Loss of autonomy and investment of energy are also real cost to organizations (Van de Ven, 1980).
INFORMATION S H A R I N G A M O N G I'AKTNERING P R O I E C T ORGANIZATIONS
Challenge four: Creating mechanisms for information exchange Sharing mechanisms implies the establishment of particular structures and policies that are designed to facilitate the free exchange of information. The structure of an interorganizational relationship is defined by specifying roles, obligations, rights, procedures, information flow, data, analysis, and computational methods used in the relationship (Kumar 81 van Dissel, 1996). Structure reduces the ambiguity by formalizing the form, process and content of the relationship and by implying a level of agreement about mutual expectations. There is some debate as to whether a simple or complex structure is favorable for setting up a multi-participant project environment. Meredith (199s) postulates that less complex and unambiguous structures lead t o less resistance to inter-organizational sharing. Brown et al. (1996) acknowledge that complex structures are an impediment, but did not find evidence that the converse is true; that is, that simple structures necessarily secure positive outcomes. Establishing interorganizational coordination mechanisms is a necessary precondition for a multi-participant project team (Meredith, ~ 9 9 ~Olsen ) . (1981) cites four ways to coordinate: "by rules and procedures, by substantive rules, by ad hoc interactions, and by autonomous adjustment." Mechanisms for project partnerships usually include setting up information exchange and organizational integration. The creation of overarching bodies, in the form of program management or committee structures, is seen as a way to help coordinate the project implementation, aid in the setting up of standards, and arriving at data and cost sharing agreements (Ventura, 1995). Finally, sharing policies need to be clearly defined as important elements in establishing and institutionalizing the information sharing relationship. NedovicBudic & Pinto (1998) group the sharing policy issues into five areas: nature of data t o be shared; responsibility/ownership; cost; incentives; and formalization of the interorganizational relationship.
J E F F R E Y K. PINTO A N D Z O R I C A N E D O V I C ~ B U D I C
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Fzgure 6:1 Conceptual Framework.
Conceptual framework The above discussion forms the backdrop t o the development of a conceptual framework that incorporates a variety of salient issues that must be addressed when contemplating the prospect of interorganizational project collaboration. While the incentives t o engage in these sharing relationships are strong, there are also significant challenges that must be addressed in order to gain maximum benefit from crossorganizational cooperation. The conceptual framework in Figure One, addresses some of the key concerns that are relevant to creating a positive and fruitful relationship across organizational lines. Broadly speaking, and following our discussion above, we have categorized four sets of issues that should be addressed in order to promote better project information sharing: context, structure, process, and outcomes.
i
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INFORMATION S H A R I N G A M O N G I'ARTNERING PROJECT ORGANIZATIONS
Context addresses four elements that can contribute to or detract from the organizational sharing process. These include the nature of the interorganizational relationship, the attitude and commitment among the project partners, their reasons for sharing information, and other contributing factors. I.
Interorganizational relationship - obviously, a key contextual variable affecting the likelihood of successful information sharing relates to any past history of interorganizational relationship. Do the potentially cooperating firms have a history of collaborative relationships or have they been contentious? Are there natural interdependencies among the organizations that can be exploited? As Pinto, Pinto & Prescott ( ~ 9 9 3 noted, ) past cooperative efforts directly shape the nature of future initiatives in the form of psychosocial outcomes.
2.
Attitude and commitment - Another important contextual issue relates to the prevailing attitude and commitment level of each potential partner entering the information sharing arrangement. Clearly, when one partner misconceives their role relative to the others, there is a strong likelihood of tension and poor communication. Likewise, if project firms begin a data sharing initiative unwillingly or without showing a willingness to coordinate their activities, the relationship is likely to fail.
3. Reasons - This issue refers to the motivations of all parties entering the collaboration. Do they do so under duress or through immediate perceived need? Do the partners have the shared goals so necessary to make this process work? The nature of the cause for the initiative - mandate, needs based, and so forth - clearly identifies who the willing participants are, how much collaboration each partner is likely to offer, and whether the relationship is positively focused or likely to quickly dissolve into acrimony.
Structure focuses on the nature of the organizational control systems, the nature of the data to be shared, and the hierarchy established to oversee the sharing process. These structural factors play a key role in establishing the nature of the cooperative effort. I.
Objective - The objective refers to the purpose of the informationsharing consortium. Typically, in project-based organizations, the
J E F F R E Y K . PINTO A N D Z O R I C A N E D O V I C -B U D I C
objective is aimed at establishing a jointly owned program, in which each industrial partner contributes their "value-added" component. 2.
Intensity - The intensity of the sharing relationship refers to the number of partners, their individual and mutual roles, and individual status, relative t o each other. As we mentioned previously, research tends to suggest that the number of partners in a sharing consortium can lead to greater complexity and difficulty in maintaining an open flow of communication. O n the other hand, smaller consortia, composed of a limited number of partners, may have the tendency t o act in a manner similar to small group dynamics research, which has suggested the prevalence for a dominant partner t o overwhelm and control the partnership. At a minimum, care should be taken in determining the o p timal number of partners in sharing consortia and any adverse effects of this intensity must be taken into consideration as part of the consideration given to the cooperative structure.
3. Overarching entities - One important component of structure concerns the manner in which oversight will be established t o best ensure the smooth flow of communications across the project partners. Among the options that can be considered are using a joint management scheme, a central leadership role, user or special interest groups to serve as the impetus for controlling the flow of information, or even an oversight committee. Research into the Project Office suggests that establishing a central oversight group t o serve as the flow of information on project management throughout the organization can be very beneficial (Block and Frame, 1998). 4. Organizational Forms - A last key element in structure that must be considered relates t o the type of structure, or organizational form, that will be used as an overall hierarchy for the collaboration. Because partnering organizations are often establishing a decentralized, temporary organization t o cooperate with external partners, the structure that is established can be quite complex and often cumbersome. Project-based firms recognize that their ability to simplify the organizational structure relative t o customers and collaborators is a strong incentive to promoting information flow in a timely fashion (Pinto & Rouhiainen, 2001).
INFORMATION S H A R I N G A M O N G PARTNERING PROJECT O R G A N I Z A T I O N S
Process represents the implementation, or active communication stage of the information sharing relationship. Once context and structure have been established and care taken to best ensure that they will work in a positive manner toward promoting information sharing, project firms must address the nature of coordination and implementation as process variables. I.
Coordination - A number of issues are relevant to establishing a positive relationship among business partners, including their attitudes toward the process, clearly demarcated responsibilities, and perceptions by all members of equity and fairness. The degree to which a positive attitude, based on teamwork, shared commitment, and persistence is developed and reinforced, serves as a key link in the creation of a coordinated effort for collaboration. Likewise, it is imperative that individual responsibilities, including clear roles and rewards, are developed and circulated as early as possible. Further, their linkage to current organizational mission and functional statements can help facilitate each member of the partnership in quickly assimilating their roles. Finally, it is important that there be a clear sense of equity among the project partners. Equity may not simply mean that all partners are equal; in fact, there typically is a lead partner to most consortia. However, it is important to emphasize that each partner will be treated fairly, as an equally committed professional with a stake in the final project outcome.
2.
implementation - Implementation issues refer to the various managerial elements that can influence, either positively or negatively, the process of project development and collaboration among the partners. For example, the existence of clear top management support for information sharing, adequate funding to support the project's development, and the management of project progress are all clearly linked to successful information sharing.
Outcomes of a partnering effort must clearly relate to the myriad outcomes from a project's development. They may be commercial, reflecting the market success of a new product, they may be enhanced decision-making, greater project efficiencies and cost savings, or better client satisfaction. Clearly, for a project to be considered successful, some aspect of all these elements is necessary evidence to consider. Ultimately, the partnering process is not an end unto itself. Partnering for pro-
JEFFREY K . P I N T O .4ND ZORICA NEDOVIC-BUOIC
ject development is a conscious, strategic decision that organizations enter into in order to maximize the likelihood that they will create a successful project. In this manner, all efforts aimed at creating the best possible environment for interorganizational collaboration are simply an attempt t o create the best possible environment for planning, developing, and implementing a project.
Improving the prospects for data sharing among project organizations Sharing information across organizational boundaries is vital for creating a circumstance in which effective project partnering can proceed. The bottom line of data sharing, however, lies in its promise to increase provision of better information for project management and strategic decision-making. Among the many perceived advantages, the benefits in cost savings and positive effects on establishing better interorganizational relationships are already recognized in some studies. Although the special nature of project partnering is often brought firms in about due t o the need to work in collaboration with rn~~ltiple order to develop a project, its inherent nature also leads to many impediments. Among many issues that are involved in sharing data, organizational (including political), institutional, economic, and technological factors are seen to play a major role. The need for partnering firms t o share information continues t o rapidly increase, but it is an effort that is complicated and fraught with numerous difficulties of managerial, technical, political, and structural natures. In short, the merits and motivations behind information sharing are laudable; however, the difficulties too are significant and should not be underestimated. From the perspective of gaining buy-in t o interorganizational data sharing for project development, recent research has investigated the impact of thc various components of the research model in terms of their impact on improving the likelihood of establishing cross-organizational collaborative relationships (Nedovic-Budic & Pinto, 2002). Although preliminary in nature, the research offers some interesting views of the data sharing model and the best mechanisms to enhance positive coordination. Further, their results present some useful guidelines for project organizations as they begin to investigate methods for
INFORMATION SHARING AMONG PARTNERTNG P I t O J E C T ORGANIZATIONS
enhancing the likelihood of effective data sharing. Some of the key suggestions include the following: I.
Early in the relationship, establish firm guidelines for data sharing. "Guidelines," in this case, refers to the need to make a deliberative effort to identify the expected contributions from all corporate partners. Ambiguous statements that support data sharing, but do not specify the types of information, amounts of information, or other structural mechanisms are not nearly as helpful as a straightforward, a priori policy that identifies data sharing partners, the information they will provide, and as clearly as possible, establishes the nature and frequency with which data sharing will progress.
z.
Data sharing requires clear leadership from all partners. Among the multiple roles that project leaders must embrace is to serve as the impetus for requiring data sharing and monitoring information transfer. There is a natural organizational inertia that can inhibit the willingness of partners to provide data willingly; further, there are often bureaucratic barriers that serve as communications roadblocks across organizational boundaries. Having strong leadership is extremely important for maintaining the momentum to collaborate with multiple project partners. Such leadership, to be most effective, should be distributed; that is, it is highly desirable to have project champions impelling an atmosphere of open communication within each of the members of the consortium.
3. In the absence of data sharing mechanisms, it is often necessary to create them. Many project organizations, faced with the need to engage in systematic and sustained information sharing, find themselves without the means to collaborate most effectively. There are a number of reasons for this lack, but primarily the cause can be traced to a ) technical and, b) interpersonaVbehaviora1 reasons. From a technical perspective, many organizations lack the technology needed to share data; for example, they may use different processing platforms, have incompatible software or transmission capabilities, and so forth. At a minimum, an audit must be conducted to determine whether the corporate partners possess the technical means to share data effectively. Alternatively, as we have noted above, the very act of sharing data across organizational boundaries may fly in the face of estab-
JEFFREY K. PINTO AND ZORICA NEDOVIC-BUDIC
lished cultural norms, create politicaVpower imbalances, or threaten established rules and procedures within each firm. It is necessary to analyze objectively the behavioral capacity for free information sharing and, in the event that clear obstructions exist, begin to develop a program whereby organizational or behavioral objections can be identified and eliminated.
4. Clearly establish the superordinate goals by which the project's partners will have incentive to share information. Past research on superordinate goals in projects focused on their effect on inducing crossfunctional cooperation (Pinto, Pinto & Prescott, 1993).The implication of that work was to suggest that a clear motive, identified with a sense of overall goals impels coordinated effort among disparate groups. The same idea of superordinate goals can serve in this case as a unifying motive for bringing together corporate partners. The value of superordinate goals lies in their ability to create a shared vision for the project, but also one that cannot be achieved by any one member of the team. Hence, they serve as both the vision for the project and a motive for data sharing. It is important to remember, that for information sharing to occur, the organizational motivation has to be positive and in this, the attitude of the organization that is taking part in the sharing relationship is crucial. More intensive sharing of information resources will come about when the agencies that are involved are committed to sharing, willing to negotiate, and work on the different issues related to sharing in a cooperative way. Proper coordination mechanisms and communication channels between organizations, establishing overarching bodies, and setting up sound policies regarding data quality and ownership, access, provision of metadata, and sharing of costs and revenues are crucial for the success of any partnership. The involvement in inter-organizational partnerships leads inevitably to changes in the existing structure and functional characteristics of the organization, as well as promoting shifts in existing power balances. This change requires minimal resistance, openness to organizational learning and adjustment, flexibility, and the readiness to deal with some loss of organizational autonomy, and control. Another factor that can strongly affect sharing of information is the attitude toward the data itself. Viewing project information as a common resource rather than as owned by an organizational entity would
INFORAMATION S H A R I N G A M O N G P A R T N E R I N G P R O J E C T ORGANIZATIONS
promote its sharing (Sussman, 1993). In their recently completed case studies looking at shared IS data, Nedovic-Budic & Pinto (1999) found that lowering unreasonable expectations regarding proprietary data is beneficial, and tends t o facilitate interorganizational data sharing. hIoreover, as information continues t o become widespread, and many organizations turn toward project partnering ventures, the power equations between organizations with regard to access to technology and information should change and further facilitate sharing among organizations. Case studies of successful partnerships will also contribute to lowering the barriers and reservations for interorganizational interaction with respect t o sharing technical and other data among project partners. Ongoing improvements in the enabling technologies, and the decreasing cost of developing and maintaining information would also enable productive sharing in the future. Advances in computer hardware and networking technologies, like the changes from centralized configurations t o distributed clientlserver architectures (Orthner et al., 1994). and the increasing presence of World Wide Web-based access to technical data in particular, have already affected these data sharing dynamics. This chapter noted that, for a variety of logical reasons, more and more project-based organizations are moving toward strategic partnerships in bidding and implementing projects of a wide variety. The result of this impetus toward interorganizational data sharing is profound and offers some important implications for research into communications, joint ventures, and strategic stakeholder management, among other avenues. To date, little research has directly investigated either the causes or effects of project partnering behavior, particularly as it relates t o sharing information with a variety of external organizations, some of which are often in direct competition with each other in different settings. Future research should continue to address the root causes of information sharing as well as its outcomes in order to offer project-based firms a better, more comprehensive understanding of the factors that can facilitate effective information transfer in ways that benefit all members of the project partnership.
Introduction I will try to argue the case for a strong narrative in support of premium products as a crucial strategic factor. I shall be selecting empirical illustrations from a study of product development projects in thc Volvo Car Corporation, a company that now is a Ford subsidiary after a period of alliances (with Renault and Mitsubishi) in the rggos. H o w can a company keep its soul in a context of rapidly shifting principles? Do company cultures and brand values help or get in the way of premium design? And what about customer satisfaction? Claimed to be the source of every sound business strategy; or was it shareholder value? First I need t o establish the quality conception behind the argument. We find in most of the literature on quality a concept that is related to different tools of asymptotic improvement like TQM, Kaizen, etc., a concept that is statistical in character and denotes absence of deviations from the product specifications. This is the concept of quality that Juran taught and I S 0 promotes. It is based in production, could be called "congruence quality," and we could not live without it. However, when we ask on what grounds product specifications should be established we approach the concept of "design quality".
PROJECTS A N D C O R E VALUES
Customer values
t
Product specifications
a
t
Product properties
Congruence
Figure 7:1 The total quality concept.
Product specifications should relate t o customer values or needs, but in industrial design, and especially in competitive markets like the car industry, one cannot easily ask the customers what they think about a model that will be on the market 5 years from now. As a matter of fact we have not met one design engineer (in the widest sense of the word) during our three years in the field who gave us any other type of comment than "If we ask the customers they will tell us that they prefer a car like this year's model!" This means that there has t o be a substitute for the input of direct customer opinion in the design work. Such a substitute is provided by the "brand values" and the articulation of needs of the selected customer group. The problem is that current brand values contradict each other. Furthermore, the temporary project charged with the development of a premium product is not independent of the "line organization" in which it is embedded. It is subjected to influence from finance, production, strategy, marketing, R&D, etc. It is also likely that the company will havc "company values" that are disseminated through brochures and seminars throughout the organization. All these influences carry with them restrictions on the freedom of design. The complexity of the information flow needed to accommodate all these constraints is overwhelming. The question is how d o project members cope, and what kind of support could help them cope? It is assumed that it is not a feasible approach to demand a stable, noncontradictory set of goals and constraints as any proper economist would do.
0bservations of premium product design in context We want to know how competent people accomplish what they do in their area of competence. It is not likely that we can achieve this through interviews, since interviews will contain information that is probably twice interpreted when presented to the interviewer. Direct observation is required in order to have a referent for interpretation and coding. This is the argument of ethnomethodologists like Garfinkel (1967),Sacks (199z),& Silverman (1998). We do not want to test whether the product developers work the way we think they should according to our theories. We want to understand how they actually work. We also want to avoid being too influenced by our own theories when we interpret or code the data we collected from the field, and for that purpose we want to elicit the help of the participants themselves in interpretation. This has been accomplished by first video recording project management meetings, and then editing short sequences from the recorded meetings. These sequences have been played back to participants individually with the question "What is going on here?" The comments have been audio recorded and transcribed. These recordings and comments on them provide the main basis for identification of communication issues. A large number of interviews, and measures of work climate on 3 occasions over a j-year period, provide background information. Focus will be on the effects on communication in a product development team of contradictions between brand values; in this specific case how members deal with noise (a quality variable) caused by priority being given to "joy of driving." First I will try to show how the brand values have developed over the last 20 years as a consequence of initiatives to solve strategic problems for the company. Then I will illustrate the communication problems caused by "noise" as a "problem" for a couple of car projects aiming to improve the "joy of driving" factor of the product by installing more powerful engines and related systems. Finally I will discuss how project management could cope with the complexity and knowledge intensity of this kind of very large project.
PROJECTS A U D CORE VALUES
The company history is the source of values The heroic individuals, depicted under the heading "Our heritage" in contemporary brochures, and presentations of brand values, and company philosophy, are usually the founding fathers. Volvo had two. Assar Gabrielsson, the outward-looking sales director of the SKF ball bearing company, with French experiences of the car industry as customer, and Gustaf Larsson, who had experience of the British car industry before joining Assar Gabrielsson in their project to produce cars in Sweden. The arguments for a likely success were that wages were relatively low in Sweden, steel was of high quality, and the Swedish roads required a more robust design than was usually the case in imported cars. The business idea from the start was to "build cars in the Volvo way." This meant that Volvo relied on long-term agreements with sub-contractors, which reduced the amount of capital tied up in the company at the same time as those sub-contractors and their experience became committed to the cause. After the Second World War the Volvo organization grew as a result of success of the small car Volvo 444 and acquisitions of former suppliers. Gunnar Engellau, who took over in 1956, invigorated product development and developed the sales organization. Focus was on comfortable ownership of a long-lived car. The guarantee, first introduced in 1954, and at first thought to be an illegal form of competition, was the first step in this direction. A further boost to the Volvo image was the sports car P 1800. Launched in 1961 it was "placed" as the car used by "The Saint" in the popular TV series. But growth and manpower shortages moved personnel turnover to centerstage in the 1960s as Gunnar Engellau prepared to leave the CEO job to his son-in-law and become chairman of the Board. This first period had brought robustness, safety, customer guarantee, successful expansion and an organization that took pride in good citizenship. Pehr G. Gyllenhammar, the son-in-law, started with a good platform to deal with the strategic problems that came about as a consequence of the democracy movement and oil shortage.
With Gyllenhammar a new era began Mr. Gyllenhammar soon initiated a series of studies of the effects of different changes in the work environment that, in time, resulted in the design of the famous Kalmar plant. This focus of attention was in step with the movement since 1968 toward "economic democracy" personified by the Prime Minister, Olof Palme. The oil crises generated inflation rates that were unheard of after the war. Mr. Gyllenhammar had strategic problems. The whole period that followed was characterized by the aim to find a larger resource base to carry the burden of the rapidly increasing product development costs. One of Gyllenhammar's first moves was to reach an agreement with the Dutch DAF-company, first in 1972 to acquire 3 3 % of the shares, and then, in 1975, 75 %. The idea was to expand the product portfolio with a small car to help exclusive Volvo dealers to survive. Later, , Dutch state invested in the company in order to uphold in ~ 9 8 1 the employment in a district in southern Holland where mining had been a large source of employment. The plant in Born, outside Maastricht was to become the site of the Mitsubishi - Volvo alliance in 1992. During the first half of the 1970s it was the truck division that kept Volvo's financial results up, but by 1976 things turned down for the whole group and 1977 promised to be even worse (still profitable, but barely). There wasn't enough of a cash flow to carry the burden of a renewal. New partners were needed. In January of 1977 Marcus Wallenberg, the strongman of Swedish industry was approached for a discussion of the future of the Swedish vehicle industry. These discussions resulted in a proposal the same year that Volvo and Saab-Scania should merge. In the meantime the Co-determination act of 1977 came into force. It stipulated that any significant change of the work environment had to be negotiated with the unions. The different unions could not agree on the terms of the merger and the leadership of Saab-Scania grew more and more sceptical. The merger plans had to be terminated. In November 1977 Volvo approached the Minister of Industry for a discussion of how Volvo's project for renewal could be financed. The minister responded that such a discussion would have to include other parties (Saab-Scania) to ensure equal treatment. These plans to involve the Swedish government were abandoned before any discussions had been held. Next the Norwegian Prime Minister, Oddvar Nordli, was appro-
P R O I E C ' S S A N D C O R E VALUES
ached. The result was a PM to the Norwegian government in January 1978 proposing that an issue of new shares in Volvo should be directed towards Norway. Initially the Norwegian government should guarantee the issue but later the shares should be privatized. Volvo would be listed on the Norwegian stock exchange and Norwegian ownership would amount to 40 %. Volvo would receive oil concessions in the North Sea and the company would also participate actively in the industrial development of Norway required for the time after the oil period. An agreement to this effect between the Norwegian government and Volvo was signed in December 1978. It required acceptance by an extraordinary shareholders' meeting (scheduled for January 30, 1979; a two-thirds majority was required) and the Norwegian Parliament. The most intensive debate ever held in Sweden on industrial policy followed. The Public Relations department of Volvo logged more than 20.000 articles in the press on the issue. Soon it was clear that large shareholders were sceptical. It would not be possible to gather the required majority. The Norwegian Prime Minister was informed. The deal would not float. Volvo was a Swedish institution that could not be sold. Next, contacts with Renault intensified. Renault had already made clear that it wanted to be a partner in the Swedish-Norwegian venture. As it failed to materialize, discussions on a Renault participation in the Volvo group started. Soon they focused on a Volvo Car, and in December 1979 it was announced that Renault would buy 20 % of Volvo Car in a three-step deal. This provided an injection of new capital. Furthermore, since the shareholders rejected the Norway deal, it was only fair that they should compensate in a new, successful, share issue. Finally, the second oil crisis that struck most truck producers in the world had spared Volvo and Scania. Both companies did very well in heavy trucks in the Middle East. Armed with strong finances Volvo could take offensive steps to reduce its vulnerability to the business cycle. A truck company in the USA (White Motor) was bought as well as a risk reducing conglomerate (Beijerinvest). In 1982 Volvo wass in a very strong position. Mr. Gyllenhammar had proven himself as a strategist. It should be noted that the state authority responsible for industrial policy published a study in 1979 ("Swedish car industry - facing the 1980s") that wrote off both Saab and Volvo as doomed.
Good citizenship Mr. Gyllenhammar was successful in establishing Volvo as a national asset. His political writings at the time (e.g., Gyllenhammar, 1973) demonstrated his ambition for the company to be a good citizen. One of the topics discussed was the work environment and the efforts to deal with those problems by designing the work organization to stimulate learning and teamwork. This was realized in the Kalmar plant where job enlargement, long work cycles, and teamwork were built into the "work station" design of the assembly plant. The new plant was opened in 1974 and got worldwide attention for its trust in teamwork as the carrier of the joy of work. The Kalmar plant was presented as a place to learn things that could be implemented in other plants. Later the new Uddevalla plant was designed on the experiential basis generated by the Kalmar plant. Also in its institutional character Volvo exhibited good citizenship. Not least, Volvo organized a dialogue with the unions that helped it take the strategic issues through its own organization without too much turbulence in the troubled times of the oil crises. Gyllenhammar was an institutional leader (Selznik, 1957) building a basis in values (safety of the car, a good work environment for the employees, industrial development for Sweden etc.) rather than in shareholder value arguments.
Market positioning Volvo was one of the first companies in the world to reduce the production rate in 1974. These were serious times for many carmakers, British Leyland was bleeding, Volkswagen reported huge losses, Autobianchi and Lancia were taken over by Fiat, Alfa Romeo by the state, Citroen went bust and the French government helped finance a solution together with Peugeot. A strategy study in Volvo at the time presented two main options: to broaden the car program (quickly) to include more than one model to invest more aggressively in developing Volvo's other business areas, primarily the Truck division. A combination was chosen in the sense that an accelerated growth of
PROJECTS AND C O R P VAI.UF.5
the truck division was combined with a broadening of the car program (Lindh, 1984). However, the new car project, P172, was stopped because the car was considered too big and costly in the current oil crisis that seemed permanent. The only addition to the car program was the Volvo 340 developed for the DAF-plant. This car was not up to Volvo standards when it was released. It did not help. Otherwise the only option was to prolong the life of the 240 series. Among other things an alliance was formed with Peugeot and Renault to develop engines. When the market turned to growth again the internal discussion on market strategies, which had to a large extent been set in motion by the current quality problems - not least with the Volvo 661343 in Holland, ended in a decision to move Volvo towards the prestige segment. This would be accomplished by leading the way for new car models by introducing the prestige version first (and cheaper versions later). The first application of this was the Volvo 760. In the meantime Volvo presented a number of experimental cars (a taxi, a safety car, a gas turbine car). The design work for the safety car went into the 760. At this time product development costs for Volvo Car were as high as 10 % of sales which was far too much. The new car was developed with an eye to the American market and with extensive testing of customer tastes in several countries. The launch in nine places at the same time went well. The "boxy" look of the new car deviated from what Mercedes, Audi and Ford presented at about the same time in 1982, but in fact the aerodynamic measures were quite favorable for the 760. Many interesting technical solutions were included. Sales surpassed expectations (in 1983 the 760 accounted for 12 % of total sales, a large figure for a new car in a higher price bracket). In 1984 the less luxurious 740 was introduced. It was helped to a quick start by the success of the 760. In the middle of the 1980s Volvo Cars stood very strong with a successful launch of the 700, with the estate version, 745, still to come. The strength was in the products with their excellent safety records and robustness. The latter aspect had been an argument since the very beginning and the former had come gradually with the 240 and then with the 700 series. The Lambda-sond had been an early, significant step in emission control. The quality control system, with results tied to an employee bonus system, had improved quality to top standard. New forms of production organization were under development. Strategically the Volvo focus was now on the development of the Renault alliance. In product development a new direction was staged
by the futuristic Galaxy project initiated in the late 1970s. The task was to look I 5 years ahead and see what cars were needed beyond the ~ 9 8 0 s One . of the first things that were discovered was that the customers voted for front-wheel drive (a difficult concession given the ageold quarrel on the issue with SAAB colleagues). The Galaxy project bifurcated into two paths. First came the new 400 series with the first front-wheel drive version (480 ES), in 1986, which, after a host of quality problems, stabilized nicely. The second path from Galaxy was the 850, which was the big car supposed to supersede both the 700 and the 240 series. The project had been going on for about 10 years when the 850 was launched in 1991. Part of the explanation for this delay was that both the 240 and the 700 refused to die. Sales continued at a decent level. Also the solutions in 8 SO required a comprehensive redesign of the industrial system. The new car had front-wheel drive and an aluminium engine positioned sideways. It constituted a large strategic step as it manifested the introduction of "joy of driving" as a core value. Still a daring "distinct and attractive" design was largely missing. The 850 was a success from the start with enthusiastic comments by motor journalists. Volumes rose quickly. The young project leader, Peter Augustsson, received a lot of attention and stories about the project began t o emerge as narratives with a "point." One such story was that at one point in time project members started to worry that the project dead line would not be met. A meeting was called t o request that the launch date be postponed. But the project leader had arranged with the CEO beforehand that when he, the project leader, asked for postponement the CEO would use abuse and a loud voice in denying a delay and declaring project dead lines sacred once and for all. The theatre performance worked and the launch date was kept. Peter Augustsson "got away" with the gambit of deceiving his fellow project members. He had tried t o obtain a postponement and he had taken abuse for the team, now they had to help him to deliver since he was in disgrace with his boss. The 850 was a strategic project in many ways. As mentioned it marked a successful shift to front-wheel drive. This manifested "joy of driving" as a core value for the brand. The movement to a higher price level had started and the brand image needed re-articulation as well as the company philosophy and this needed t o be shared among employees in a new "dialogue." As the dialogue progressed in articulating the company philosophy the alliance with Renault kept growing more intimate.. .
PROTECTS A N D (:ORE V A L l J E S
The Renault affair For Volvo the alliance with Renault, signed in June 1991,was not uncontroversial, but there had been cooperation on engines for more than zo years and close links had been developing on the financial, commercial and technical areas for a long time. It was obvious that the intention was to develop an even closer partnership. Better start brushing up your French! In September 1993 a merger was announced. Renault was doing well at the time. It had had a remarkable comeback with a cost and quality revolution towards the end of the 1980s; its Clio model had won the Car of the Year Award and Formula I racing was succcssful. This was in stark contrast to earlier times when its cars were considered charming but unreliable, unsafe and rust-prone by Swedes. The Renault organization, which prides itself on its thorough analysis of all competing cars with detailed data on every component, had never analyzed a Volvo car. Renault people made jokes about the Volvo obsession with safety. Volvo's "voiture a survivre," was a contrast to the Renault "voiture de vivre". A car should be optimized by weighing safety against weight, design and joy of driving. One should not be fundamentalist on one variable (safety) like Volvo was. Volvo engineers in the Engine department had recent experience from the joint development of a &cylinder engine with Peugeot and Renault. It was rather negative. The Renault organization was considered bureaucratic, formalistic and francophone. The working style was seen as "strange" and the attitude was that they (the engine department) had little to learn from Renault on engines. This kind of pre-alliance experience was not gathered and analyzed systematically in Volvo. Both Renault and Volvo discussed deeper cooperation from the recognition that the future car market would require a faster pace of model changes and the costs for product development had to be shared. At the same time Volvo Car Corporation (VCC) was working on a solution to another problem of economies of scale. A survey in Europe demonstrated clearly that a majority of the Volvo dealers could not uphold enough volume on the basis of the large Volvo. The smaller Volvo 400, built by what used to be the Dutch (70 % state owned) Daf, was no solution since it was not considered to meet proper Volvo standards. A new small Volvo had to be developed, if nothing else to save the European dealership network. If the partner in this project had been Renault it is likely that the production facilities in Holland would
have been liquidated and that was unacceptable to the majority owner, the Dutch state. Mitsubishi Motor Corporation (MMC) had been approached at the Frankfurt Motor Show in 1989 and showed an interest since it needed a foothold in Europe. The joint venture with Mitsubishi was designed as a learning project. The idea was to design a production facility that could produce two competing cars on the same assembly line. The new small Volvo was to be built on an existing platform, the one used for Mitsubishi's Carisma. Most Volvo engineers had difficulties making a connection between the Renault and Mitsubishi projects. Renault representatives tended to see the Mitsubishi alliance as treason. A key idea in the alliance between Renault and Volvo was "kquilibre" (balance) and a large number of committees with 50150 representation were established. The worries among Volvoites about how equilibrium could be upheld with a partner 2.5 times bigger were soothed by Mr. Gyllenhammar pointing to the strong brand name of Volvo, its most valuable asset. As real outcomes of the implementation of the "kquilibre" principle became manifest in the first jointly owned units, "GIEs" (Purchase department, Quality department etc.), and these were headed by French managers, this was, to French and Swedish managers alike, an indicator of what the post-merger organization would look like. As all Swedes know, the project to turn the alliance into a merger failed to win the approval of the shareholders in December 1993 and Mr. Gyllenhammar resigned. The public debate focused on the "golden share" to be held by the French government, and which would give it veto power. But in the opinion of the present author it was the internal "betrayal" of Mr. Gyllenhammar's strategy that was the main cause of his frustration...
The alliance from the inside The inner events, the experience of doing actual work with the French colleagues, had a dynamic of their own. Few activities were undertaken to prepare people for the differences in culture and ways-of-working in the alliancelmerger. You had to learn from experience. One such arena for learning by doing was the concrete work of the Pq project, the common platform for the next generation of larger cars. At the start of the project Volvo engineers felt that they would not be able to defend the
PROJECTS A N D CORF. V A L U E S
core values of the Volvo brand. The initial allocation of responsibility for the design confirmed this. Also, even if there was agreement on the core values for the project (Safety, Qualit y and Environmental Concern) with profile values for the two brands to be built on the platform (Renault's "pleasure to drive," "strong styling," "innovative solutions" and "strong concepts wherever possible" and Volvo's "durability" and "distinct styling"). In the case of Volvo those added values remained supporting, while in the Renault case, Renault entertaining the philosophy that values have to be optimized in each project on that project's premises, it was not clear what the core values were. After a negotiated start the Pq project was fully operational from the summer of 1993 There were cultural difficulties in communication but the P4 project managed to maintain a team spirit, largely due to the Swedish project leader refusing to allow fractions in the project, e.g., the Swedes, to organize separate meetings and also to rely on sound "engineering rationality" which was demonstrated when early decisions were changed on the basis of test results. The project cared for its autonomy and because of this there was some positive learning o n both sides. When summing up its Renault-experience the evaluators on the Volvo-side draw the conclusion that a niche producer like Volvo has as its first obligation to defend and cultivate its core competences and core values. This applies also to social values and brand image.
The breakdown of the alliance As late as September 1993 internal surveys in Volvo indicated that there was broad support for the alliance in spite of the dissent over the decision to give responsibility to Renault for developing parts and functions that were critical to the Volvo brand image. However, dissent was growing and it came to be articulated via the engineers' union. Already at a union meeting with top alliance managers in April 1993 there were criticisms that top managers of Volvo did not back up the Volvo values. Did they not respect the competence in their own organization? Did they not realize that this would demoralize the Volvo team? At the time Volvo was at its lowest level in financial results while Renault had recovered nicely after the earlier crisis. In response to this criticism Volvo top managers pointed out that the new car, the Volvo 850, which was the pride of the development engineers, had been developed at greater
expense of money and time than their competitors. When union representatives responded that the 850 contrary to Renault models was doing well in the US market the answer was that according to the voice of the American customer the Volvo engineers had a lot to improve before they could aspire to give lessons to others. Instead they should pay proper respect to the high level of competence of the engineers who had built a car like the Safrane. After this incident, it is reported, the engineers' union found that it had to defend the honor of the Volvo engineers who felt deserted by top managers. ("We realized that they had lost faith in VCC - in us! Gyllenhammar wanted t o sell us off. If these messages were meant to make us more sympathetic to the merger plans, it was an odd way (to d o it)"). O n a more concrete level the plea for a reassessment of the allocation of responsibilities in the P 4-project was ignored. From that April meeting on the managerial problem at VCC was the management of dissent. A seemingly direct consequence was that the formerly "leak-free" Volvo Company started t o "leak" information t o journalists. Looking back at this experience one can point to the central issue of core value fundamentalism that seems to run through the whole story. Fundamentalism in the sense that one consistently refers to "tradition" in one's arguments, but also in the sense of not compromising ("optimizing") core values. If a safer car has to be heavier so bc it. This aspect of premium car development should be taken very seriously and the consequences have to be worked out in order for communication inside the organization as well as with its environment to be effective. The problem is that some values are highlighted a t certain times and others at other times. It takes some rhetorical skill to weave it together into a convincing argument. Accusations of hypocrisy (saying one thing and doing another) may easily be provoked. Especially when coupled to the celebrated principle that the company must be true to its brand values in all its activities the problem is rendered conspicuous. One solution might be t o talk about different values in different arenas and at different times (Brunsson, 1989). This can probably be accomplished by a continuous production of a narrative about the origin and goal of the current activity (e.g., designing a new car model) that refers to different aspects of the core values and thus provides "entries" for holders of different values. Once "entry" is gained into the unfolding story of the activity in focus the member can participate in the further elaboration of the adventure. Mintzberg (1989)describes strategies as emergent;
PROJECTS A N D CORE VALUES
yes! N o plan is ever "implemented" as anticipated (and the same goes for preliminary product specifications).
Summary The "point" of this rather lengthy account of the history of the Volvo core values is that they are related to critical situations in the company history. They are emotionally loaded and public. Robustness was a core argument from the start. Assar Gabrielsson, one of the founding fathers, is reputed to have pointed out that it is people who drive the car and that they need protection. Safety became a key success argument with the 240 series. A car model that would not die served to build that core asset in the Volvo brand name. It also established Volvo's lead in the estate car segment, which landed it squarely in the family car business. The Lambda-sond justified Environmental concern as a core value. The 700 series constituted a continuation. It added a distinct design that seemed daring at the time even if there were a couple of cars in the USA with a similar look. The 850 model, launched in 1991, added the "joy of driving" dimension that was necessary as the brand strategy was to move the Volvo further up toward the premium car segment. It also marked a significant break with the earlier argument against front-wheel drive. The interesting thing about this is that it was the customer who had the final say. Even if most of the development engineers still preferred rear-wheel drive they took the Galaxy findings to heart and acted accordingly. Large changes in the production process and component design (especially engines and transmissions) were required. With this Volvo Car was firmly set in the Premium Car direction. When Mr. Gyllenhammar signaled that he did not believe that VCC could make it (save its soul, as it were) on the basis of its new core values the organization rebelled. The values, contradictory as they may seem, were shown to be charged with emotional energy. It is against this background of emotionally loaded and partially contradictory brand values that our study of argumentation in car development project meetings has been conducted.
The problem: Fundamentalist arguments and project management The issue then is: how can a fundamentalist approach to certain of the brand values be combined with effective communication, and maintenance of the customer appreciation of the brand? The nature of consensus among competent peers on complex issues could be described using the following constituent ideas (Moscovici & Doise, 1994, p. 3 ff.): When consensus develops in a social situation it is typically based on choice. When facing choice, the group, through the confrontation with arguments pro and con, are made aware of the danger of error, which could he eliminated by consensus. We resort to consensus to overcome the doubt, but also to end divisions and misunderstandings between defenders of different positions. We believe strongly in the benefits of mutual criticism and free examination of arguments t o reduce prejudice and subjective judgment on our way towards a sound decision. But as we approach choice and action there is a convergence of individuals to associate with others, to demonstrate commitment t o a shared attitude towards the contemplated action so that others can rely on us to d o our part, include us in their plans, group and project. Action presupposes unity of intention and discipline in pursuit of a common fate. Consensus goes beyond acceptance or agreement. It binds the team together - even if everything can be discussed and questioned there is an underlying obligation t o conclude an agreement that will be kept. An agreement that is obviously brought about by external pressure cannot be considered consensual. Consensus is built on common understanding (Habermas, 1984). Furthermore, there is a link between consensus and the cultivation of reason. In the end people have a common principle of intelligence that will bring them in harmony toward reasoned solutions, enlightened solutions in spite of clashes of interest or opinion. We thus have three central conceptions underpinning consensus formation; choice (and the elimination of the danger of error), trust (arriving at an agreement that will be kept), and reason (intelligence through free exchange of ideas and opinions). Moscovici & Doise (r994) claim that the premises of classic theories (that, I . Consensus is best achieved if the group has precise information and everybody participates, and, z., it is arrived a t through com-
PROJECTS A N D CORE VALUES
promise) d o not hold. Instead "group polarization" is a common phenomenon. The concept was first introduced by Moscovici & Zavalloni (1969) t o describe the finding that group members, during their discusson arrive at extremist consensus and that individual attitudes had become more extreme than they were previously. This result has been reproduced in a large number of experiments since then. If it is true then the group rather than the individual is the key to organizational change. The typical experiment design was that participants were interviewed individually about their opinions on some complex issue and then the group was charged with the task of arriving at a common opinion. After the group had reported the result of their discussion the members were interviewed individually about their opinion again. It was found that the groups tended t o arrive at extreme positions in relation t o those members brought with them into the group. Also, individual opinions after the group discussion tended t o have moved towards the extreme position of the group consensus. Had the group, due t o restrictions on the group discussion, e.g., time limits or a fixed agenda, arrived at a common opinion through compromise, individuals tended t o return to their original opinions after the experiment. It was Stoner (c.f. 1968) who discovered that groups, contrary to conventional wisdom, tend towards taking more risks than individuals do. He explained this phenomenon by the dilution of responsibility that the group carries with it. The practical conclusion is to use groups when risk taking is desired and individuals when caution is called for (the problem is whether a group or an individual should decide here!). But with Moscovici and Zavellani's results showing that the group effect appears also in non-risky tasks a new theoretical dimension is introduced. Moscovici & Doise ( ~ 9 9 4 point ) t o a mobilization of "intellectual and affective potentialities of each one of its members by making them participate in a collective action, not in order t o increase cohesion, but to allow them t o breach together the barrier of norms from which, if faced alone, they would recoil" (p. 41). Still it remains t o be explained why, in a group where there is first dispute and then agreement on a common position, there is genuine individual change in opinion. This change seems t o be related to the intensity of involvement (c.f. Csikszentmihaly's, 1996, "flow") and the displacement of opinion is not a divergence from the mean position of group members but a shift towards the dominant position (understood as the position of the
most involved member, i.e., the member who argues with the most intense commitment). Further, the shift will be more extreme the more directly involved the individual member is in the discussion, the more marked the differences, and the more valuable what is a t stake in the discussion is perceived t o be. What is at stake, as mentioned by Moscovici and Doise, may be seen as a common ground for the bond of loyalty between the members of the group (for instance the "core values" that constitute what is to be considered a new car model that lives up to Volvo-standards). Such values, in order t o have the proposed effect (organize consensus), must be shared t o some extent by the members. They are social representations. Potter & Wetherell (1987, p. 142 ff.) challenge this theory of social representation and the thrust of the critique is directed ( I ) towards the assumption that the community of representations establishes group identity. This assumption is problematic because it creates a vicious circle of identifying groups through representations and representations through groups. There are also ( 2 ) empirical problems connected with the underlying assumption that there is consensus in representations for the persons in a group. Such presuppositions will tend to smooth over internal diversity. Specifically there are distinctions t o be made between the actual use of a representation ("the riot was caused by poor housing") and the mention of available representations ("the left wing press have claimed that the riot was caused by poor housing") and between use in generalized formulations (about police behavior in riots) and in specific situations (police behavior in this riot). Finally ( 3 ) there is the issue whether social representations should be operationalized as cognitive or linguistic. We have chosen a linguistic approach in that we have videorecorded project management meetings and elicited the help of participants in two product development projects in interpretation of what is going on. This has amply demonstrated that there is internal diversity!
Empirical observation of value based product development Our study followed the installation of turbo engines and low profile tires in the smaller SN 40 models for 1998 and the further development aiming a t the US market in 1999. The problem is that when you increase the "joy of driving" by increasing speed and "sportyness" you
P R O J E C T S A X D C O R E VALUES
also. increase noise - road noise as well as wind noise. These consequences were expected. There was a noise expert on the development team in the first of the projects. He divided his time between noise reduction projects for the Quality department and this project where he was responsible for "Properties." This meant that he was a quality assurer regarding the specification written into the contract between the project leader and top management for this car model. "Properties" was one of the functional managers in the project who gathered in the PMG (Project Management Group) meeting half a day every second week t o follow up the status of the project and take decisions o n proposed solutions to outstanding design problems. The project was located away from headquarters, in Holland, at the joint venture production plant with Mitsubishi. The context for the project was rather complex due to the facts that the new car was built on Mitsubishi's Carisma platform (modified to reach Volvo safety standards but still focused on common parts to gain economies of scale) and that production was "outsourced" to the Dutch joint venture NedCar. The reader may imagine the amount of negotiation with outside parties added to this project on top of the traditional problems with interfering functional departments (cf. Womack et al, 1990). Here we are focusing on contradictions between brand values. The PMG meetings are long, intensive meetings and the group is large, about 2 5 people, because of the philosophy developed in Volvo t o achieve coordination by keeping many members well informed about all aspects of the project. The consequence of this is that meetings tend to become seminars rather than decision-making occasions. The meetings may be inefficient, as most respondents complained, but the project can be well coordinated. To solve this problcm the project had a Technical Management Group (TMG) meeting on the afternoon before the PMG meeting. Three episodes, involving noise consequences, from the video-recorded PMG meetings have been replayed to participants individually and their responses t o the question "What is going on here?" have been audio-taped and transcribed. The episode itself and about 15 interpretations by participants for each episode have been analyzed. Two common factors emerge. It seems like conflict betwcen core values initiates discussion on responsibility, and that these discussions tend to push members towards the periphery of the group. These were the episodes (forgive the brevity):
Episode I: The noise expert had driven his test car at high speed on the German "Autobahn" and discovered a wind noise probably stemming from the trim molding around the windshield and/or sunroof. He thought he should sound the alarm and he had brought up this quality problem in the previous day's T M G meeting. The discussion there had focused on fixing the trim molding and that would be the task of the "Exterior" lead engineer. In the PMG meeting the project leader, who was not present at the T M G meeting questioned whether this belonged to the project. The Quality department should deal with this since it was the geometry of the base car that was the root of the problem. The counter argument was that it was the high speed that caused the noise and it was a strategic issue since customers buying the turbo version were likely t o drive fast. Anyway there was a simple solution (that in fact had already been initiated by Quality) and that was to fix the trim molding better. Now Exterior was anxious to define the problem as a fixing-the-trim-molding problem rather than a noise problem (you never know what can happen with noise problems). In the interview afterwards the noise expert commented that he felt let down by the project leader; when you bring up strategic issues like this people should take them seriously and initiate a proper study of the sources and not jump at simple solutions like this. People will not want to bring issues up if they are ignored like this (Colleagues indicated that they thought that he should have known that Quality was already at work on this problem). Colleagues described Exterior as a person who has little tolerance for ambiguity and the episode confirmed this view of him. It was concluded that both the noise expert and Exterior lost position in the team in this episode. (Centrifugal move). Episode 2: The noise expert is reporting in the PMG meeting on the status of a large quality project to reduce road noise. A large number of improvements have been identified, each rendering the odd decibel of improvement. He is talking about an experiment with a different stiffness in some rubber bushings in the wheel suspensions. He mentions, in passing, that the current ones deviate from specifications. The project leader seizes upon this and asks: How come that we have reject parts in current production? After moving over possible suspects the gaze stops at Purchasing, who must admit that he does not know. He feels accused. It turns out that an earlier discussion with the alliance partner had ended in a decision that was not registered as a specifica-
P R O J E C T S A N D CORE VALUES
tion. Purchasing had acted correctly; the specification had not been updated. N o apology. Purchasing felt left as an outsider. Episode 3: The lead engineer for Interior is reporting on the status of his area of responsibility and takes the opportunity t o get a formal decision on work t o introduce a noise reducing insulation solution for the firewall. It was sponsored by Quality for the diesel engine version, but could be used to improve also the petrol engine versions. The supplier could do the CADICAM work. A subordinate had given this excellent idea t o Interior just before the meeting. The project leader had approved, here was an overhead slide with the required figures. It was just a formality. The problem was that the project leader was not present at this meeting that was led by his deputy. There were questions Interior could not answer. Most devastating was the Controller's question about who was paying. Interior stood there like a fool when Production Control took the opportunity to attack this young engineer for sloppy work. The request was tabled. Interior had lost face.
Analysis Even if these situations, and other ones we have observed, are never clear cut due t o the complexity of the specific embeddedness of the project I claim that a common factor when the project deals with conflicts between brand values is that member positions in the team shift. It is a matter of moving towards a more peripheral position because of failure t o assume, or not being given, responsibility, or the opposite. In another set of episodes where the project faced constraints from the environment (cost reviews or time schedule changes) it was found that the team tended t o band together in the fight for the integrity of the project and members who stood up for the project could gain position (centripetal moves). There was little reference to the brand values (implicitly taken for granted) in argumentation, but there were these gains and losses in position (or social capital). This agrees with a theory of membership work as presented by Munro (1996),which consists of two aspects: identity work and alignment. In order t o be a (competent) member of the team we have to have a role in the team as a constructive contributor that is recognized by the
others. We work out an identity in the context of the team and the measure of our success may be some kind of centrality in the group. Then we are trusted to speak on behalf of the group and make binding commitments. A member that loses face will be under observation. This seems t o be a strong driving force in premium product design projects. The other aspect of membership work is "alignment" where acts of the member are aligned to the common quest of the team. A first requirement for this t o happen is that the common quest is articulated and that the aligning member has an opportunity to contribute. The articulated common quest is a narrative under construction. It provides the context (ground) against which the contemplated contribution (figure) is given meaning, - by the proposer as well as by the assessing members of the team. In order for the project narrative to invite the membership t o work it must exhibit subjunctivity (Bruner, 1986). Subjunctive verbs introduce conditionality, for example, if a student asks me to become her thesis advisor my answer could be: "You write me a thesis proposal" indicating that I am inviting her but my action will be conditional upon how I judge her action. In this sense subjunctivity invites t o membership but introduces possibilities (possible worlds) rather than certainty. Another aspect of the articulated narrative is that it helps members avoid misunderstanding since they work out "implicature" (Grice, 1967) from a common ground. Grice introduced the Co-operative Principle meaning that any conversation is a co-operation between participants who have to follow a large number of rules to accomplish an enjoyable conversation. The principle is broken down into four maxims (quality, quantity, relation, manner), and by breaching these maxims a speaker can signal that there is something behind what is said, an implication. The co-produced narrative mentioned above provides a joint basis for sense making and, in this way, for working out implications once the signal is given.
The strong narrative solution There remains to account for how the narrative is co-produced by team members: The first requirement is to abandon the speaker's intention as the starting point. The fact that a speaker loses control over the meaning
PROJECTS AXD CORE VALUES
of a text as soon as it is uttered (and hearers go to work attributing meaning to it) introduces uncertainty in communication. The speaker goes "public" with a speech act and is exposed to the risk of "misinterpretation." Cooren (2000) points to the fact that utterances are actions in the sense that they have narrative form. He adopts the semionarrative theory of Greimas (1987) to provide a canonical form of a narrative and adds the idea of "actant" (Callon, 1986; Latour, 1996). Utterances of two kinds are required: utterances describing a state and those describing doing to arrive at a canonical form of a narrative schema (figure 7 : ~ ) .
Manipulation -wonting to do - having to do
Competence - being able to do
- knowing how
Performance - doing
Sanction Recognition of perfomance
to do
Figure 7:2 Canonical form of a narrative schema (Cooren 2000)
The point with this schema is that it depicts speech acts as action cast in a narrative, project shape. When we understand each other's speech acts in this way it is only natural that we shape our contributions to the exchange in alignment with, or in opposition to, that narrative. An utterance produces a communicative situation that links people together, via an object (the text), i.e., somebody is addressing somebody else. This link is formed when the text does something to the recipient (The sign "Beware of dog!" gives me a warning; it is an actant). In this way the recipient attributes what the text is giving t o her by relating the text to other texts to form a reasonable interpretation (never certain). These productionlattribution dimensions determine the types of transformations that are implied. To each of these types of acts can be coupled ideal conditions of satisfaction (like sincerity). Next we turn to rhetoric to identify the two strategies (liaison and dissociation) we use to make people accept our discursive objects. Sometimes persuasive rhetoric is not required since there are procedures that render conventional what is otherwise not conventional (like contracts or difference in rank) - silent rhetoric. Through rhetorical devices, or silent rhetoric, my narrative may get
inserted in your narrative; I will give a contribution t o your project, if the parties accept such an insertion. Such a mechanism is possible if we can mobilize the missing link, the instrument that is used in accomplishing the narrative. Here Cooren has already laid the ground by separating the text from the speaker and point to the text as "actant." (Latour, 1996). If we look at the contribution (sub-mission) t o the project (mission) as an actant we can also see that it is quite possible t o work under the mission (alignment) without being totally committed t o all its goals (like the academic can submit a paper t o a journal). If, however, a participant wants to link hislher identity t o the project (for career reasons) membership work is the central aspect. We are likely t o find varying identification with the project among participants in premium product development. Shifts in their position in the project are illustrated in the three episodes listed above. My claim is that the project narrative can accommodate internal diversity and still maintain team cohesion. Such a narrative I call "strong." Some properties of a strong narrative are: I.
A strong narrative contains instantiations of the core values of the organization that the team producing the narrative represents. This means that the narrative is a carrier of values as applied to the current and to the expected future time. The story, through the relations of its constituent parts, presents its meaning, like the biblical story about the merciful Samaritan presents the virtue of mercifulness (cf. also Weick's, 1995, views on sense-making as enactment). Bruner (1986, 1990) argues that there are two modes of thought, both irreducible to each other because they have different operating principles, criteria of well-formedness, and procedures of verification. One mode, the paradigmatic or logico-scientific builds on conceptualization and formal operation ila the syllogism. It is the traditional scientific mode of thought with deductive reasoning as ideal and with a tendency towards universal statements. This mode of thinking leads to good theory and is suited for arguments applying instrumental rationality t o demonstrate that a proposed solution is the best given a clear goal. The other mode, the narrative mode, leads t o a good story and is well suited for arguments based on value judgment in complex, multi-goal situations. Judgment of the goodness of a story is based on its sequentiality (Bruner, 1990, p. 43), the unique sequence of events, mental states and happenings that involve human beings as actors. The configuration of the actors in the plot gives them meaning.
PROIECTS A N D CORE VALUES
2.
A second feature of a narrative is that it can be "real" or fictional without loss of power as story; it has a structure that determines its overall configuration (or plot). It has only a metaphorical relation to reality.
3. A third feature is that it "specializes in the forging of links between the exceptional and the ordinary" (Bruner, 1990, p. 47). This is a crucial point in need of comment here since it relates the story to its context. A culture is a set of norms that determine what is ordinary, or what is canonical. It tends t o endow the traditional or the conventional wisdom with legitimacy and authority. But it must also have procedures for rendering departures from those cultural norms meaningful. This is where stories come in. When you encounter something out of the ordinary and ask somebody what is going on that person will usually tell a story that contains reasons for the occurrence - that make sense of it. The story will be an account of a possible world where the happening makes sense. "The function of the story is to find an intentional state that mitigates or at least makes comprehensible a deviation from a canonical cultural pattern." (Bruner, 1990, p. 49, italics in original) There is also a dramaturgical quality in narratives. Burke (1945) provided the famous pentad of the anatomy of drama; an Actor, an Action, a Goal, a Scene, and an Instrument, plus TROUBLE (an imbalance between any of the five components). The drama consists of the deviation from the canonical and its consequences. This means that stories will relate to values, i.e., what is morally valued, appropriate or uncertain. The well-formed narrative will usually dwell on the concurrent intentions of the actor and the developments of the real world, the struggle between the two. In detective stories we see this duality in the plot of the murderer's actions being gradually uncovered by the detectives in the second plot of his activities t o find clues and draw conclusions (Czarniawska, 1999). 4. A strong narrative has subjunctivity that invites interpretation. Subjunctivity, as mentioned, makes a statement open to alternative readings. The Webster Dictionary explains subjunction as: "relate to, or constituting a verb form or set of verb forms that represents an attitude toward or concern with a denoted act or state not as fact but as something entertained in thought as contingent or possible or viewed emotionally." Write in "I suggest he write a letter!" is a sub-
junctive form that lets the rest of the story be dependent upon whether he chooses t o write that letter or not. The point is that subjunctivity invites the reader or hearer to enter into the story and help complete it. It generates an uncertainty that we tend to want to eliminate by joining in co-producing the narrative. This property of a narrative of enlisting the reader in the "performance of meaning under the guidance of the text" (Rruner, 1986, p. zj) is built on three features according t o Bruner: triggering of presupposition, i.e., the creation of implicit rather than explicit meaning, subjectification, i.e., thc depiction of reality not through an omniscient eye that views a timeless reality, but through the filter of the consciousness of protagonists in the story. multiple perspective, i.e., beholding the world not univocally but simultaneously through prisms each of which catches some part of it. 5 . A strong narrative provides for alignment by implicature. The narrative has more meaning then it says. The narrative has implications (or "implicature" to use Grice's, 1989, term) that have to be worked out by the participants in the dialogue on a project as it is progressing in co-production among participating specialists. The dialogue on proposed solutions to design tasks is a cooperative game and participants are well advised to apply the Co-operative Principle (Grice, 1989). To illustrate what this means refer back to the evaluation of the Renault-Volvo alliance. One point made by the Renault engineers about their Volvo colleagues was that they tended to go for the suggested solution directly without the proper laying out of relevant criteria and possible alternatives. After all designing a car is an optimizing exercise where choice must be weighed on its merits in relation to the set of relevant goals. You have to be aware of how prioritizing one goal affects others. How can you take knowledgeable decisions any other way? The Volvo-engineers tended to think that the Renault engineers put on their performance again and again, repeating what had already been agreed on, and not getting to the point. After all a project meeting is a decision-making forum not a seminar. The function of the strong narrative in the attribution of meaning t o statements and submissions in the project is that it will serve as the common context used to work out implications (when an utterance means more than what is said).
mmunication stems CHRISTOPHE MIDLER
Recent literature o n innovation strategy and organizational change has challenged the classical punctuated equilibrium pattern (Abernathy & Utterback, 1978) that alternates long periods of stability with short bursts of radical change in the dominant design of products. Research into high-tech sectors such as the computer industry (Brown, 1997) and into the mass-production sector (Chapel, 1996) has addressed the issue of repeated radical innovation trajectories and proposed theoretical patterns for "neo-industrial organizations" (Ekstedt and al., 1999), "intensive innovation-based strategies," and "design-oriented organizations" (Hatchuel, 1999; Midler, 2002). This chapter analyzes such ever-changing contexts. We try to demonstrate that such innovation trajectories cannot be analyzed as merely a succession of product projects, but rather must be tightly connected to deep transformations in the "permanent" organization where they are found. Our conceptual framework in analyzing such dynamics is based on the basic concept of deszgn system, defined as consisting of three components (Mahmoud-Jouini & Midler, 1999): the company's strategy, the knowledgellearning management system, and the project management process for new product development. Such a conceptual frame-
CHRISTOPHE MIDLER
work is very similar t o the action/knowledge formation process theoretical framework for analyzing neo-industrial management (Ekstedt and al., 1999). We will attempt t o demonstrate how keeping track of intensive innovation trajectories over the long term requires the periodic reshaping of the design systems of a firm, and, consequently, leads t o deep a renewal of such internal organization processes as reframing boundaries and relations with markets and other companies. Our case study will examine a major European automotive supplier of car radio equipment that offers a paradigmatic case of major, repeated breakthroughs over the last four decades. The company we studied has, by dint of repeated and significant changes, managed to remain a worldwide leader in its field throughout the period in question. Its name and shareholders have changed on several occasions. The company has carried out numerous far-reaching internal reorganizations, and its relationships with automobile manufacturers have been similarly transformed. In the first part of this chapter, we analyze the successive changes of the product, from the first car radio developed by the firm in the late 1950s~t o ongoing new generations of "in-car, multimedia equipment." These products involve technologies as varied as advanced radio systems, information technology, and GPS (global positioning systems), that provide services such as communication, navigation, security, and entertainment. The second part of the chapter analyzes the various steps in the firm's evolution from initially being a spin-off of a major European electronic company t o redefining the customer interface t o meet the after sales-OEM transition, internal organizational restructuring of product development and technology management, and financially merging with another major first-tier automotive supplier and service provider. This chapter is based on a series of interactive research studies which began in 1994 (Kesseler, ~ 9 9 8 ) ,(Midler, 2000) (Lenfle & Midler, 2002). These studies are part of a research program within the Centre de Recherche en Gestion de 1'Ecole polytechnique on innovation strategy and project management which analyzes design system transitions in various industrial contexts (Benghozi and al., 2000).
INTENSIVE INNOVATION CONTEXT AND D E S I G N SYSTEM DYNAMICS
Part one: The product trajectory: history and characterization There has been a series of major transformations in the world of car audio since the rgfos, in terms of technology, architecture, and functionality. Vacuum tubes have been replaced by transistors and integrated components, and software development has moved to the forefront. Architecture has evolved in terms of definition of internal electronics system components, the systern/control interface, system integration into the automobile, distribution of components between those built into the system and those available via remote control. Functions increasingly removed from the original purpose have been incorporated, such as, CD and cassette players, telephones, navigational systems, emergency aid. Markets too have evolved, as distributor-based marketing t o the consumer market has been replaced by the supply of premier equipment to manufacturers. Today, the simple act of naming a product, or even calling it a product rather than a service or system, is problematic.
I.
From car radio to Information-CommunicationEntertainment (ICE) systems
The history of car radio began in 1929 with Motorola. Philips developed its first car radio in 1934. The technology, based on that of traditional radios, used vacuum tubes with all the associated problems of power supply and volume. As a result, the first car radios were of poor quality, hobbled by problems of interference, unreliability, bulkiness, and high energy consumption. Until the I ~ ~ O Sproduct , innovations were mainly tied t o developments in electronic components, notably the replacement of vacuum tubes with transistors in the 1960s (Philips introduced the first car ) . this technological developradio to use only transistors in ~ 9 6 ~With ment, service quality improved while costs declined, and product architecture could be transformed so that all product functions could be incorporated into the standard-format "box". Beginning in the 1q7os, the innovation dynamic accelerated and . functional improvements in radio opediversified (see Table 8 : ~ )New
1960
1950
1970
1980
Radio with integrated compact cassette Stereo Digital (LCD) display
Radio integrated with CD player Rodio with interface for analogue car phone Remote control on steering column External display on dashboard
RDS (Radio Data System) & TMC (Traffic Message Channel) Radio connected CD changer Digtal Sound Processor Rodio with digital car phone
Integrated with in-car PC (car phone, navigation system, speech recognition, email, fax, phone, TV, CD ROMj Digital Audio Broadcasting
Ploy recorded information
Simultaneously receive music, information and smple data
Receive specific, filtered traffic inbrmation
Inteructivity; Multimedio; Customization of products
Speed and capacity of microprocessors Obiect oriented programming Communication busses Flat screen displays
Speed and capaciiy of microprocessors
User perceptible product volue
Simple radio
Additional feature regarding information transfer
Receiving music and information
Technological progress
Tubes used since the beginning of car radios
Transistors
Additional module: Integrated circuits Additional module: CD Tape Deck Laser technology: digital data compression; robust micro mechanics
Frequency ronges
Short Wove (SW); Medium Wave [MW);Long Wave ILWI
SW, MW, LW, Frequency Modulation (FM]
SW, MW, FM
Selection of radio stotions
Manually with rotary button [capacitor technology)
Manually and mechanical preselect buttons
Product destination region
France
Europe
Radio
LW,
1990
2000 prognosis
SW, MW, LW, FM + subcorrier
SW, MW, LW, FM + subcarrier
Manually and mechanical preselect buttons
Electronic search of stations (Phase Looked Loop]
Fully electronic search [outortore, alternative frequencies, program type recognition, ...I
Electronic with various feotures depending on selection by customer
Europe
Europe
World
World
SW, MW, LW, FM + subcurrier and DAB transmission bonds
INTENSIVE INNOVATION C O N T E X T A N D DESIC;N 5 Y S T t M DYNAMICS
ration were introduced, including digital displays, preset stations, RDS, and TMC. New functions were increasingly added t o the basic radio function, functions such as cassette and CD players, GSM telephonetradio receivers, GPS-based navigation technology, on-board computers, and today, dynamic navigation, and Internet access. Car radios have been transformed into information-communication-entertainment (ICE)systems. Product architectures have also changed greatly. As chip-based components were integrated into the box, platform architectures could be steadily redefined and increasingly complex functions added without a need for more space or additional cost. Software then became more important, and the number of hardware components decreased. Finally, the electronics "box" became detachable from the faceplate, to provide enhanced security (removable front panels). The architecture transformation also involved the inte-gration of ICE systems into the car. Increasingly, the box is no longer subject t o the constraints imposed by standard formats and connections: e.g., steering controls and some information displays can be moved, front panel design can be integrated into that of the dashboard, CD changers can be located elsewhere in the car.
2.
Description of the product trajectory
We will use four characteristics to describe the innovation dynamic for the product: technology, product architecture, use functions and distribution methods.
A process based o n rapid and far-reaching changes in technology Clearly, technological advances, in this and other areas of the electronics industry, have driven the dynamic governing car audio products, including those of the electronics components (vacuum tubes, transistors, components, chips), communications protocols, and computer technologies that play an increasing role in car audio systems. We will highlight three consequences of this well-known phenomenon of ongoing change in electronics and computer technology. First, the dynam~cgoverning innovative product offerings in car audio systems is largely based on continuous cost reductions, the concomitant increase in system power, and the more compact size of new technology. This primarily applies t o economic dynamics driven by product
CHRISTOPHE M I D L E R
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94
year
Figure 8:1.Transition from Hardware to Software. (Source: Kesseler r998) offerings. Next, the trend towards smaller size supports a system architecture dynamic that constitutes a major challenge for the various industry players. We will address this issue below. Finally, the permanent nature of these redefinitions ensures that, although electronics plays a crucial, strategic role for car manufacturers, they have never been able t o master research into the field on their own (witness initial attempts that ended in failure). In the 1970s France's Renault, in particular, attempted t o develop a subsidiary but had to abandon the idea because it was unable to maintain the appropriate electronics expertise in an environment of constant change. Consequently, trends in car audio systems are primarily driven by companies providing electronics technology. This explains the current problems described in the next section, where we see that enhanced understanding of how products are used is increasingly essential to proiect success.
Constant changes in system architecture Product architecture is another field marked by major changes, changes that fall into three categories: the architectural dynamic of the internal "box," the architectural dynamic of integrating the system into the car, and the architectural dynamic of the relationship between integrated components and components outside the car. These three dynamics are closely intertwined. Internal system architecture has been subject t o two co~~comitant trends. The emergence in 1993 of the concept of the platform as a stand-alone technical entity provided a way t o reduce technical diver-
INTENSIVE I N N O V A T I O N C O N T E X T AND DESIGN SYSTEM DYNAMICS
sity while maintaining the capacity to produce a wide range of finished products. A trend towards modularization (Baldwin & Clark, 1997)is gradually establishing an engineering architecture based on functional definitions, as shown the figure 8:2.
L Central Unit
Antenna
--
Abbreviations: GPS: Global Positioning System provides exact position OF vehicle using satellite information CD GSM: "Global System for Mobile CD ROM telephony": Used in Europe but not in the US &Asia (AMPS standard] W:Television CD: Compact Disc CD ROM: CD containing software loudTope: Tape Deck speakers
- -- -Tuner
GPS
GSM
phone
TV
-o
t ,
Key board
Driver
Figure 8:2 Technical architecture of an ICE system in 2001. Source: Kesseler 1998
Architecture of the combined car audiolautomotive system has been subject to three different trends. First was a trend towards the concentrationlintegration of technical components within the box, using a standard format and interface, a phase which finished in the 1960s. Then came a reverse trend towards relocating certain box functions elsewhere in the car, a process that began in the late 1y8os, as, for example, radio controls were moved to the steering wheel, dashboard displays were converted to digital displays, technical functions were integrated into other locations in the car (e.g., tuners in the antenna, CD changers under the seat or in the trunk). At the same time, a trend towards stylistic integration of the system into the car's interior design was also evident.
Architecture between built-in functions and functions accessed remotely is a recent but important area of change. The available services are determined by the complementary nature of built-in functions (normally the radio receiver) and functions provided by outside service operators (typically, radio transmitters). This distribution of roles is undergoing major changes. Built-in functions that have so far been mostly passive (such as a radio receiver) are now becoming more activc, so that users can define services (such as telephones or geographical locating services) based on information generated by the vehicle itself. As telecommunications data travels at higher speeds, a number of elements that in the past had t o be stored in the vehicle itself, either physically or as software, could be moved outside the vehicle, such as CD ROM-based navigational media. All of these major architectural changes have had profound effects in terms of value distribution and the relationships between the firms that design and operate these systems.
The functional dynamic The following five points summarize the nature of this functional dynamic.
At the outset, an approach in which new usage indicators are adopted from fields other than the automotive field. The use of functional components is defined and understood outside the automotive setting before these components are adopted for use there. This was the case with the car radio itself as well as with cassette players, CD players, car telephones, and minidisk players. In this way, manufacturers can rely on the customer's previously acquired understanding of how the product operates. These components must be significantly adapted when they are imported into an automotive environment, so as to cope with vibration and interference, adapt t o the ergonomic and safety requirements for their use with a conductor, select automatically the best transmitter frequencies (RDS), etc. A major expansion in areas for exploration. Whereas initially only radio was involved, companies today define their field as one of information-communication-entertainment (ICE) systems. By bringing together tuner technologies (radio communications), GPS (locating systems), GSM (telephone services), television, processors, CDs and CD ROMs on a single platform, manufacturcrs have greatly enlarged the scope of potential uses for these systems, for purposes including navigation, tourism, traveling assistance, communications, and games.
IXTENSIVE INNOVATION C O N T E X T A N D D E S I G N SYSTEM D Y N A h l I C S
Today, one of the major difficulties for companies in this field is to explore this burgeoning array of new functions, in areas that diverge from the traditional fields in which electronics engineers and manufacturers operate. Accelerated creation of new usage indicators specific to the world of cars. In addition to this process of adopting functions from other domains, functions are increasingly being created specifically for use in automobiles. Navigational systems are the best-known current example of this, but other services to assist drivers include tourist guides, communication with manufacturer after-sales service departments, and fleet management. The point we wish t o emphasize is that, in the past, the adaptation of functions from other fields benefited from the fact that customers could apply skills learned outside the automotive setting. This considerably reduced the risks in assessing the value of these functions in the eyes of potential customers, and greatly accelerated the adoption of these functions for use in cars - i.e., no learning curve. However, this is decidedly not the case when it comes to entirely new functions. The significant learning curve required of customers today is a major obstacle to deploying new innovations in cars, since it calls into question traditional methods for marketing new products, which innately consist of building company notoriety and educating potential customers. New competition between services integrated into the car and "portable" services. Along with this expansion in the number of fields t o be explored, another notable factor is the emerging competition from portable products such as portable CD players, telephones, and notebook computers that provide users with capacities that formerly only builtin electronics could offer. A redefinition of distribution methods with regard to innovation. At first specialized distribution channels were used for car radios. This situation changed in the 1970s: on the one hand, the energy crisis of that decade led t o the disappearance of most specialized dealers, while on the other, vehicle distribution networks demanded that car audio systems be distributed as an after-sales accessory (the Parts and Accessories business). Finally, in the 198os, distribution via OEMs (Original Equipment Manufacturers) expanded, as car audio manufacturers shifted their sights from the consumer market to supplying products t o car manufacturers. The table below indicates the spectacular growth in this market.
CHRISTOPHE MIDLER
rn Aftersales
Table 8:2 Evolution of turnover of O E M and after-sales activity. Source: Kesseler 1998
The growing significance of OEMs relative to after-sales service involved not only market share but also the role played in the innovation dynamic. Until the early 199os, innovations were first tested in the after-sales department before being transferred to the OEMs. Today, this time lag is decreasing, and innovations are emerging among OEMs at an increasingly early stage (see table below).
Boldface type: Initial marketing of the innovation. Regular type: Subsequent marketing
Table 8:3 Innovation trajectories in car audio systems. Source: Kesseler 1998
IXTENSIVE INNOVATION CONTEXT A N D DESIGN S Y S T E M D Y N A M I C S
Part two: The innovative firm odyssey Design cooperation patterns and innovation management dynamics The car audio "product" has been profoundly transformed several times over the past 40 years. During this time, the organization we studied has been one of Europe's leaders in the ongoing revitalization of car audio technologies, functions, and markets. How has this firm been able to withstand the repeated crises arising from the successive redefinitions of the product? We will argue in Part Two that the firm's durability can be traced to its ability to redefine its design system to ensure that this system remains highly effective for the range of designs that arise from product evolution. We will break down this dynamic into four stages, and describe the salient aspects of the related design system model for each.
I.
Stage one :Separate design, the importance of integrators and of standards
The most notable aspect of the prevailing model during the early stages of car radio was that radio designers were distinct from car designers. The car radio seemed to be a variant of traditional radio products and was designed in the research centers of firms such as Motorola or Philips. The integration of the radio into the car rested on two avenues for convergence, one gradually replacing the other: O n the one hand, there was the integrating player who would complete the design of the combined curlcar audio system, which was incomplete up to that point: i.e., the network of specialty distributors mounting radios in cars. Until the rg7os, integration of the radio into the car was in the hands of specialists. This was partly a matter of physically installing the radio, antenna, and speakers into the car, but it also involved resolving the numerous problems created by interference generated by the vehicle's electrical equipment. Components had to be added to this equipment in order to eliminate static. In the 197os, this integrating player would change: on the one hand, the energy crisis of that decade led to the disappearance of most specialty craftsmen, while on the other, vehicle distribution networks demanded that car audio systems be distributed as an accessory (the Parts and Accessories business). At first, this transition was not a smooth one, as the network of
(:HRISTOPI-IT:MIDLER car distributors did not have the electronics expertise t o handle problems arising from the incorporation of radios into cars. But it had a major consequence, in that in the eyes of their customers, manufacturers, by virtue of their networks, became responsible for car radio performance. After-sales service gave rise t o a design phase focusing on improving the compatibility of the car and its radio. O n the other hand was the emergence a gradual standardization process for the car's and the radio's functional and engineering specifications, whereby each could anticipate the dynamic of the other without explicit coordination. This standardization involved both the radio's design constraints to be observed and the evolution of manufacturers' car specifications, including integration of the DYN format into the dashboard design, interference suppression in electrical equipment, provision of necessary connections for powering the radio, and speaker and antenna prewiring.
2.
Stage two: the development of O E M products and platform-based design
OEM' distribution would clearly pose a significant challenge in terms of design. Whereas, under the previous model, the radio was integrated into the car after production and sale, now this step could be taken beforehand. The key notion behind this second stage is one of a "fully equipped car." This means offering the customer a level of quality newly validated in the prototypes, at an attractive price that takes into consideration the cost of incorporating the radio mounting process into the production line. However, it should be noted that this model was still far from the comprehensive design of a car with built-in radio. As was generally the case at the time, the relationship between the car manufacturer and the supplier was primarily driven by the manufacturer's purchasing department and the supplier? (new) OEM sales department. There was little cooperation between the engineering departments of the two firms. For the manufacturers of car audio equipment, this new distribution
'
On thc French market, rhe first car radios marketed by OEMs with new cars appeared in 1981 for Renault and in 1989 for Peugeot.
I N T E N S I V E INNOVATION CONTEXT AND D E S I G N 5YbThM D Y N A M I C S
channel represented both a major growth opportunity and a new factor to be adapted to. Car-manufacturing customers attempted to impose particular specifications for their product ranges and the array of specifications exploded. The concept of a platform was t o become the means of integrating this new diversity while preserving the economies of scale that are essential in the electronics field. In 1993, the studied firm grouped its products into families: one up-market product line, two mid-range lines and two low-range lines. In a still later generation of products, manufacturers could concentrate on just two platforms high-range and low-range - that generated all OEM and after-sales products.
a Technology
I I Platform
Application
n x Consumer market ("Aftersales"] products
n x OEM products
Figure 8:3 The three-step model of technology integration. Source: Kesseler 1998
3. Stage three: The co-development of the
joint car/lCE system. A third phase, initiated by car manufacturers, got underway in the early ~ q q o s ,with their development of enhanced project processes (Midler, 1993). This development was t o entail multiple changes in the design process, two of which should be emphasized. O n the one hand, there was a much greater need for integration among various project contributors, in order to arrive at a higher-performance and more stable design compromise, with a resulting cost reduction and shorter timeframe. One consequence of this strategy was to increase the power of
CHRISTOPHE MIDLER
suppliers as major players in the design of automotive products. On the other hand was a need to account for the distinct nature of each project, so as to enhance its differentiating value. Innovation plays an essential role in this regard. The rapid increase in the power of these new key players in the manufacturers' design process was to accelerate in the early 1990s with the creation of relationships described in management literature as codevelopment (Garel, Kesseler & Midler, 1997) or black box sourcing , a crisis among suppliers involved (Clark & Fujimoto, I Y ~ I )triggering in the internal OEM design model (Kesseler, 1998). The demands for innovation, specificity, and incorporation into the car ran up against the "push" engineering logic prevalent among suppliers (technologies - platform - product). The platform logic had the paradoxical effect of delaying the introduction of innovations in the OEM market, as neither the interface nor the supplier's internal organization provided a means by which project requirements could be redirected back to the designers who could address them. Based on this analysis, in 1994 the studied firm undertook a thorough revision of its design procedures (Kesseler, 1998). It created "Lines of Business" (LOBs)specific to each manufacturer, and having close engineering relationships with car project teams and provided with design and engineering capacities so that the product could be adapted to specific elements of each project. It reorganized the internal relationships between platform designers and LOBs so as to eliminate the inertia associated with this dual design approach and to allow those involved earlier in the process to incorporate the manufacturers' expectations more effectively. Thus, three years after addressing this serious crisis, the firm was the first supplier to its major customer to obtain certification as a partnersupplier. Various products provide concrete evidence of this ability to incorporate a built-in system into the vehicle's design much more thoroughly (see Figure 8 : ~ )in terms of design, controls, and functions.
INTENSIVE INNOVATION CONTEXT AND DESIGN SYSTEM DYNAMICS
4. ccCo-learning"of innovative offerings in
built-in services The experience of the years 199o-rgq~ broadly validated the significance of this model but also revealed its limits. The framework governing development projects was too limited to allow for the exploration of truly new functions or technologies. In addition, the principle behind co-development was to create a cooperative design process addressing a defined functional target: the definition of this functional specification fell outside the scope of this process, and went hack to the pre-project planning or research stages. Co-learning: challenges and scope During the second half of the 1990S, various pre-project cooperative design experiences were initiated, building in most cases on the success of prior relationships arising from co-development. Thus, in 1996, the studied firm created an entity of its own in cooperation with Renault, the "Multimedia Data Communications Planning Group," whose purpose was to pave the way for the introduction of innovations in automotive projects. We will define this approach as the co-learning concept (Midler, 2000). The objective of co-development is to foster cooperation on a new product with the goal of enhancing the expertise of each partner regarding value-enhancing functional targets and the technical solutions with which they can be attained. Co-learning, on the other hand, is geared towards coordinating methods for exploring innovations and creating expertise regarding product use and technology that will prove useful in subsequent projects. More precisely, co-learning can be defined as cooperation in three tasks: Exploration: In the area of built-in ICE systems, we have seen that the number of potential services has exploded, including services such as navigation, "low-cost" navigation, television, videogames, and the Internet. The first task of the co-learning process is to explore this growth as exhaustively as possible by monitoring advances in technology. Sorting: The second task is to sort through these potential services and identify pertinent innovations, with a view towards extracting the greatest value from the innovation, as defined previously.
CHRISTOPHE MIDLER
Bringing these concepts or half products (1,e Masson & Weil, 1999) to maturity: The third task is to bring the innovation t o a mature form, so that it can be incorporated into the project without unduly delaying the release of the final product or endangering production quality. The challenge to the supplier and manufacturer as they carry out these tasks in cooperation with each other is, of course, t o reduce costs as well as the associated risks of such early exploration. The compatibility problems that arise in the later stages of a project, when supplier and manufacturer fail t o coordinate on a "road map" in such a rapidly developing area, are significant, as is the risk of duplicate exploratory work. We must emphasize the twofold aspect of this co-learning process: it simultaneously involves defining innovative functional specifications that have the potential for further development, and mapping out the technological path by which they can be given concrete shape. New participants in the co-learning process One consequence of defining this learning field is the need to open up the co-learning process to new players essential to ensuring the success of the tasks defined above. Such players include the service operators who will invent innovative content built into these systems, and distribution networks, which play a key role in Stage One but whose role in design all but disappears thereafter. The involvement of service operators. In October 1997, the studied firm, which was a subsidiary of a major electronic group, was transferred t o a German group, one of the largest telecommunications firms and service providers in Europe. The firm contributed its terminal expertise to link automotive systems t o the network offerings and services of its new owner. The German group is a European manufacturing firm active in dashboard instrumentation, a field in which the studied firm had no presence, so this step was consistent with a move towards reconfiguring ICE system architecture within the automotive cockpit module as well as between cars and external service providers. This consistent approach was not to survive the battle over portable telecommunications among firms in the field. O n being bought out by one of its competitor, the German group was forced t o sell its auto subsidiaries in order t o finance the growth in GSM. They were purchased by Siemens, another major electronics firm, but one lacking experience
INTENSIVE INNOVATION CONTEXT AND DESIGN SYSTEM DYNAMICS
in service. Note that this story is not an isolated example of cooperation between telecoms and automotive firms: for example, in zooo, PSA created a joint venture with Vivendi Universal to develop built-in data communication services. The return of the distribution network as a key factor in innovation. We noted in the preceding section a trend away from the use of existing functions (typically radios and cassette and CD players) towards the creation of new functions specific t o the automobile (typically navigation). The issue of teaching customers these new functions seems to be a key element in making these innovations succeed, as measured by the speed with which they are adopted. Internal organizational dynamics associated with co-learning As in the previous stages, the implementation of the new co-learning model entails both a reorganization of the relationship between cooperating companies and internal transformations without which this relationship cannot function. The primary trend on the part of manufacturers is to revamp their research departments, w h ~ c hhave so far been only minimally integrated into the design operating cycle, and which are now assuming a role in the co-learning process. O n the part of suppliers, the organization into I>OAs, which can naturally integrate these new areas of cooperation with manufacturers, must be thoroughly revised insofar as the challenge is now t o provide direction for the general dynamic o f the company's product portfolios and technologies, rather than to customize "semi-products" (Weil, 1999; Le Masson & Weil, 2000). Finally, the control of such learning processes calls for new management principles to meet the specificities of such projects (Lenfle, 2001; Lenfle & Midler, 2001): such projects d o not lead t o marketable products but new knowledge which only acquires value in product projects. Ensuring solidarity and equity to face the risk Co-learning brings a cooperative dcsign process into play in an area where the level of uncertainty is considerably greater than is the case in co-development. The traditional problems relating to the theory of agency and contracts analyzed in the economic literature, problems such as moral hazard or adverse risk selection, play an important role. One significant problem, currently the subject of research, is that co-
CHRISTOPHE M I D L E R
learning is spreading from the cooperative planning of isolated projects t o the joint direction of project portfolios. The question of dynamic balancing of risk in this portfolio is obviously a critical stumbling point. Finally, in order to keep the cooperation active and fruitful, the players involved in such co-learning situations have t o evaluate and continuously control the process in terms of equity. In a co-development project, the cooperation can be clearly framed by the target of the common project and the rather explicit prior contract between the partners. Such framing is impossible in co-learning situation, because the results are multiple, indefinite, and changing, and the term of the relation unfixed. Cultivating feelings of equality among the players involved in the cooperation appears, therefore, to be a key and difficult challenge in co-learning situations. For Piron ( Z O O O , Z O O I ) inter-firm equity comprises three ways in which justice or equity finds practical expression: distributive, procedural and interactive. Distributive justice involves the search for balanced proportionality between the partners - a "fair return," in Piron's words. The point is, for the firms to find a fair distribution of goods and powers based on the goals sought and the resources committed by each. Procedural justice refers to the feeling that procedures have been fair. The point is for the participants to judge a decision-making process relative to a reference that is wellknown and considered legitimate. The factors that influence this include a feeling of participation in decision-making, an explanation of decisions, and clarity concerning expectations and the rules of the game, all of which influence whether the participants feel they have been treated fairly and equitably. Finally, interactive justice refers to individual interactions based on fairness in behavior, which makes it possible for a decision to be considered doable. Hence, respect and courtesy between allies prove to be important in fostering a positive atmosphere for interpersonal relations during the co-operation process.
Conclusion By emphasizing the "renewal paradox" of non-innovative, projectbased construction firms, Ekstedt, Lundin and Wirdenius ( ~ 9 9 2poin) ted out the importance of a "permanent" organizational context in providing a sustainable environment for innovative projects over time.
I K T E N I I V E I N N O V A T I O N CONTEXT AND D E S I G N SYSTEM D Y N A M I C S
In line with this thesis, this chapter illustrates how, over 30 years, the multiple and diversified innovative breakthroughs in the car ICE systems trajectory are linked with major changes in the internal organization of the studied firm in relation to its operating environment. In the transformation process of the innovative design system of the firm, the "co-learning," inter-firm cooperation model appears to be the final, promising but also problematic step in meeting the challenge of the intensive innovation context. The co-learning situation can be described in the following matrix. It describes a situation where the partners of the innovative cooperation are confronted by both important economic stakes, in terms of market shares and investment, and p e a t uncertainties with regard to the possible results. Such a situation differs from that of a co-research partnership, where the stakes are less important, and from a co-development alliance, where the focus on the planned target is a key resource for inter-firm coordination.
Uncertainties and risks Economic stakes (market & costs)
Low
Research partnerships
Low High
High
Cedevelopment
Celearning
Table 8:4 Different cooperation situations in innovative design processes. Source: Midler 2000
We pointed out in our last section some of the characteristics of and conditions for efficient co-learning management; these include multiprojects, multi-horizons management, immaterial results, loosely framed relations and commitments, and shared feeling of equity among the participants. Such characteristics clearly cannot be described by traditional project management models. The opportunities for research into innovative project management in the new millennium are still great.
modes porary
BARBRO I. AN
Y L. W I L S O N
Introduction It has been suggested that we are witnessing a marked drift in the way enterprises are perceived. In his brief essay Lundin (2000) observed that enterprises exist at two levels - a relatively "permanent" one that might be considered "traditional" in an organizational sense and a relatively transient one, where teams were assembled t o carry out tasks within certain budget constraints of a monetary and temporal nature. The expressed view was the permanent organization is intended to live on for an indefinite period of time, while the temporary one was planned t o have a limited lifespan. It was also implied that permanent organizations achieved stability through routinization of its operations. Looking backwards into the history of organizing human ventures, it is easy t o point out that temporary organizations must have been abundant. Most of them could be associated with what might be called "one-of a kind" projects, such as Stonehenge and the pyramids, or making trips to collect Danegeld. Yet these projects were not wholly unique. There are other stone-settings like Stonehenge. Likewise, there are many pyramids and variations on pyramids such as the ziggurat. Further, we know of many Viking chieftains who went south, bent on trade and plunder. But in these cases the enterprise and the project were synonymous. The permanent, routine-based organizations are no
ORGANIZING I N TWO MODES
modern inventions either. The Roman army and the Catholic Church are often being mentioned as outstanding examples. These organizations, of course, also ran projects in a sense. Every new campaign, every new cathedral could be seen as a project, even if the constraints on the project were more vague than those of modern projects. Indeed, it is not clear that projcctification is necessarily a trend. It might rather be a symptom of the present situation in the global economy. Twenty or twenty-five years ago it was fashionable to talk about Kondratieff waves (c.f, Mensch, 1979). That is, the economies of industrialized nations were winding down a "long wave" of development that would bring about a significant change from stagnation at that time to unlimited opportunity. Without making a judgment on the use of these waves in economic forecasting, it seems to us that those predictions have materialized. New industries have been formed, e.g., software and biogenetics, and old ones have reinvented themselves to accommodate new technologies. Future economic historians thus will likely look back on this period as a turbulent one in which a new long wave was formed. Nevertheless, the issues that Professor Lundin has raised with regard to temporary and permanent organizations serve as a framework for understanding how organized entities, organizations, enterprises, or public agencies apparently are in the process of evolving. The discussion in this paper is oriented toward how projects are embedded in such organizational settings, and how learning takes place in the two types of organizations that were mentioned earlier, namely routine-based ones and project-based ones. The suggestion that is presented is that modern enterprises are mixtures of "the permanent" and "the temporary." This observation has been described as projectification, etc., and appears to be a mixture of old and new phenomena. In this regard, most research fails to provide a good understanding of how the permanent and the temporary are distinguished and how they are interlinked. The reason for this oversight is that theorizing has tended to be overly concerned with formal or informal structures for grouping activities. A better way of viewing this matter, we suggest, is to picture both the temporary and the permanent organization as comprised of flows of activities. Our feeling is that observations support the suggestion that temporary organizations and permanent organizations appear bonded more closely than present theory indicates. That is, routine-based organ-
B A R B R O I. A N E L L A N D T I M O T H Y L . WILSON
izations appear to be growing more projectified and the temporary ones growing more routinized, i.e., taking on characteristics from the routine-based organizations. In this changing picture, the concept of "structure" itself might be re-examined. The concept of evolution would better be pictured in the ways in which the flows are bundled into functions or processes, how the bundles are related to each other and how the activity flows are governed, for instance in divisions or in work groups and how these change over time. This merging process is discussed in this paper. We would further like to reflect on the "learning dilemma" of present theory. That is, temporary organizations produce knowledge, but permanent organizations have a difficult time in capturing it. Something appears to be overlooked in arriving at this conclusion. It would seem that learning between the two modes of organizing is an important factor when bridging the gap between the two extremes. In other words, project-based organizations, being around as they have, would seem to have reacted to a need to learn from their projects. Thus, some observations are made in this area.
A framework for discussion So when did the permanent organization and the project organization develop into separate categories, making it worthwhile to study projects in their own right? One hypothesis might be that we are talking about a social construction.' This observation is based on the fact that for a long time researchers and practitioners alike have been focusing their interest on organizational stability, and mainly on structures for grouping activities. These interests were consistent with organizations as they appeared to exist in the study environment; Wilson (1977), for instance, describes how difficult it is for theorists to disengage themselves from their social environment - a social definition of reality as it were. For many years, finding the one best way of developing the opti-
' Othcr hypotheses are of course possible. The one presented here, of course, is the one that we think is most consistent with observations.
O R G A N I Z I N G IN T W O MODES
ma1 organizational structure occupied the minds of both managers and researchers. The classical literature offers a good selection of examples. For example, the early writers on organizational theory, such as Taylor (1911); Gulick & Urwick (1937); Weber (1947) and Fay01 ( 1 9 4 9 ) ~ painted a picture of the organization as a very stable one. They thus concentrated their effort on prescribing how this stability might be maintained and enhanced. Another factor behind the interest in structures and stability might also he the amounts of fixed capital needed in companies engaged in mass production for mass markets. The rigidity of the production facilities in combination with high costs and economies of scale favored large organizations and work routinisation. In relatively stable environments, there was no premium on flexibility and learning. In Figure 9:1 below, the main thrust of the earlier theorizing and study of organizations would be placed in sector A. Modern organizations, however, might better be described as flows of activities. These organizations and their descriptions can be understood in terms of settings and foci. Two types of settings can be defined - routine-based and project-based. Likewise, two foci appear relevant - routines and projects. The matrix illustrated in figure I describes four fields of organization studies, where field A represent the classical focus on actual or optimal routines in the permanent, routinebased organization. Field B, which so far has attracted rather few studies on how project-based are managed or should be managed, is associated with permanent, flexible organizations, while field C represents the focus on project management. Field D., finally, represents the focus on the cases where the organization as an entity and the project are one, that is, the types of unique projects that Stonehenge or Viking expeditions represent. SETTING
PROJECT-BASED
ROUTINE-BASED
FOCUS I
ROUTINES
1
PROJECTS
A. The permanent, stable organization. C. The temporary organization.
B. The permanent, flexible organization. D. The "one of a kind" organization.
Figure 9:1 Organizational Settings and Foci of Modern Organisations.
I
B A R B R O I. A N E L L A N D T l M O T l l Y 1.. W I L S O N
The classical literature on organization theory reflects the early fascination with stable structures, (the A field). Chandler studied close t o a hundred of America's largest corporations when formulating his thesis about thc connection between strategy and structure (Chandler, 1962). Rlau ( I ~ s s when ) , trying to find the connection between size and structure, studied government agencies, universities and large department stores. Woodward (1965), when trying to link technology t o structure, studied approximately a hundred companies, the smallest having about 250 employees and the largest having more than ~ , o o oemployees. Lawrence and Lorsch (1967) studied ten firms in three industries plastics, food and containers - in their search for the relations between the environment and the efficient organizational structure. They do not disclose the size of these companies, but as they interviewed between 3 0 and 50 upper- and middle-level managers in each firm, one might surmise that they were not small ones. Mass production in its Fordian sense lost its appeal in societies where affluence grew and was shared by almost all, as decreed by the current political doctrines. The ability t o turn out a variety of products and services and t o he constantly renewing the offerings became a competitive advantage for companies in this turbulent environment. The developments in technology strongly supported this trend. Time - as in time to market, delivery just in time and so o n - was seen as one of the central measures of performance. Flexibility became a word of praise and flexibility was seen by the new gurus as the only way for a company t o cope with the turbulence global competition and electronic media were blamed for causing. (Peters, 1992). Likewise, turning activities of public agencies into projects was a way to enhance flexibility. Consequently, we see projects virtually everywhere as well as the emergence of project-based organizations. (Fields B and C in the matrix). Although numerous, the project-based organizations have not yet attracted the same interest from researchers and practitioners as the routine-based ones. In developing this picture, we naturally have drawn on ongoing work in the area of projects and temporary organizations. In thc literature on projects, a distinction has been made between the "hard" project, the purpose of which is to create material artifacts such as buildings, bridges, boats, engines, and the "soft" projects, that purports to change the socially constructed reality, for instance making an enterprise switch organizational templates from functional specialization to
O R G A N I Z L N G IN TWO MODES
process, or t o change the leadership style from authoritarian to participative (c.f. Turner, ~ 9 9 9 esp. , 25-27). Projects in both private and public settings have been studied in what has become known as the Scandinavian school (c.f. Esktedt, et al. 1999; Rlomquist & Packendorff, 1998b; Ostergren & Miillern, 1995). Likewise, Soderlund (zoooa) has developed a typology of temporary organizations that reflects employment with the parent organization and the relative structure of any given group in a 2x2 matrix.
0bservations An organization, any organization, is (supposed to be) a tool used by people individually or in groups to accomplish a wide variety of goals. Its existence is not an end in itself. In other words, an organization embodies the collective knowledge, values, and visions of people who are consciously (and sometimes unconsciously) attempting t o obtain something they desire or value. An organization is a response to and a means of creating value that satisfies some human need. New organizations are spawned when new technologies become available and new needs are discovered, and organizations die or are transformed when the needs they satisfied are no longer important or have been replaced by other needs (Jones, 1995). In this section we reflect on three of the quadrants in Figure 9:1 - the fourth, one of a kind organizations, is of lesser interest at present.
Activity systems in permanent, stable organizations During these turbulent times, authors have produced a variety of structures meant t o capture current organization forms. In a conceptual nature, Mintzberg (1983) pictured a range of structures that look like sections through chess pieces - each associated with a class of organization. The mid-nineties, however, may have been a crest for thoughts on structures. Handy (199 5 ) suggested that the modern organizational structure would be condominium-like with the vertical modules being ) that he saw companies in Silicon Valley projects. March ( 1 9 9 ~ bindicated that were disposable, i.e., the temporary and permanent had become interchangeable. Then there are the ideas that companies are but nodes
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in a larger web of cooperating firms, e.g., the network organization (c.f. Achrol, 1997; Ashkenas et al., 1995). Ekstedt et al. ( ~ 9 9 9focus ) not on structure, but on processes, most importantly the processes that may be used t o regenerate the permanent organization. The structure that might be associated with such a picture would be some hybrid on permanent organization in which an ability to cope with temporary change organizations has been wed. Bill Gates (1995, 135 ff), who has some experience in building an organization, suggests that a worldwide business transformation is occurring. With friendlier software, networks can reach every employee and beyond - into the world of suppliers, consultants and customers. This vision would be consistent with Porter's (1980) idea of competitive nichers or even the concepts of network organizations (c.f. Achrol, 1997; Ashkenas et al., 1995). Gates' perception is a movement toward smaller, more effective companies. In the longer run, he suggests many businesses will decentralize and disperse their activities. The creation of virtual organizations has been seen as one path to the future. At least in the automobile industry, perhaps the archetype of "old" industry change, that appears to be happening (Economist, zooza). Against this background, but recalling the basic definition of an organization, it might be prudent t o keep an open mind about structures. Instead, a "permanent" organization might be seen as flows of activities that transform input t o output, or, as complex sets of routine cycles, that turn input into output, depending on the technology of the organization (Thompson, 1967; Nelson & Winter, 1982). The repertoire of cycles varies from firm t o firm. Some firms have a limited cycle set, while others have wide sets, where different subsets of cycles might be set in motion by different inputs. In these cases, it also happens that the same cycle set is called forth, whatever the input. Routine-based organizations, of course, do a lot of things. They develop processes t o accomplish their ends. They, or more properly individuals in these organizations, plan, make decisions, transform inputs to outputs, craft the organization's identity, serve as a birthplace for projects, lend stability t o these projects, and provide a depository for knowledge. But even the most seemingly stable routine-based organizations have t o develop and evolve to survive in a changing environment. The evolution process in this case takes place at the routine level when old routines are replaced. Evolution in this context must not be understood as meaning exactly the same process as in biology. Routines
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are not genes. An individual cannot change his or her genes, but an organization can change its routines. For evolution t o take place, four processes are of critical importance. One leads to the creation of variation, intentional or unintentional. The second one, retention, leads t o some variations being favored, that is repeated in the case of routines, while others fade away and are extinguished. The third process, that of retention, leads to incorporation of the selected variations in populations, for instance in routines in organizations (Nelson & Winter, 1992:Aldrich, 1999).The favorably selected variations may spread by a process of diffusion (Dawkins, 1976). These processes occur in a setting where competition for scarce resources occurs. The processes of selection and retention might also be understood as a form of learning. Variations might be generated from several sources, for instance from planned changes, from simple mistakes, or from random incidents. In such a situation, doing things by projects offers possibilities for learning, by introducing variations that the permanent organization can select and maintain. In this way, the project might be seen as a quasi-experiment, that is, as a part of the trial and error way in which organizations explore existing possibilities. In this regard, it has been suggested that one characteristic of "excellent" firms is that they continually conduct these experiments (Peters & Waterman, 1982). One might perhaps say that the permanent organization has learnt something from the temporary one when changes in routines, routine cycles, or sets of routine cycles are changed.' The "planned change" approach can, however, produce errors o r failures. Turner (~qqq), in fact, suggests that these types of projects carry with them a high failure rate. That is, the output of these simple trials cannot be completely controlled and might introduce more harmful than helpful variations. From an output assessment standpoint, the organization has learned little if the projects leave no traces of changes, preferably improvements, in existing cycles of routines or in the routines themselves. Many change projects in organizations cause a temporary uproar, but after a while, the normal mode of operations is restored.
Other criteria for learning of course also exist, such as changes in the common value and belief systems.
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Activity systems in permanent, flexible organizatiorts These firms operate through projects. A typical example might be the consulting firm. The firm as an organization with an identity is (intended to be) permanent, but its mode of production is dominated by projects. Managing portfolios of projects has not received so much attention as managing sole projects. That is, the projects studied in the beginning of the tradition of research on projects mainly concerned projects within routine based organizations. Now the field has been widened to include the management of several projects or project portfolios (Anell, 2000; Payne, 1995; Wheelwright & Clark, 1y9za) as well as projects with independent organizations as participants (c.f. Gates, 1996 for the approach at Microsoft). This type of organization might be seen as consisting of a "corporate roof" covering several "project condominiums", which are "based on prescripts", that is codified knowledge, but also on a set of comparatively stable structures and routines (Wilson & Anell, 2001). For instance, the personnel and the finance functions in a project-based organization are often clad in routines. The routines might be learnt or copied from routine-based organizations. These offer a variety of routines, which means that the same problems of selection and retention, that plague the routine-based organizations trying to learn from projects, are felt by the project-based organizations trying to implement efficient routines. However, the projects within the project-based organization are also becoming imbued with routines and assume a more cycle-like character. There are several reasons for this. One might speak about the learning curve associated with repeating similar types of projects. Competition forces organizations to be both effective and efficient, which means that the projectbased organizations cannot afford to make the same mistakes any number of times. One might also speak about the increasing codification of project management knowledge into prescripts, such as the PMI Handbook or Microsoft Projects (Anell & Wilson zoooa), as well as the increasing professionalization of project managing, which is now taught even at universities. The central issues in managing a project organization concern, of course, the generation of profitable projects and the successful delivery of the expected results, be they hard or soft. Problems worth addressing continue to exist, however, such as initiating projects, allocating resources to projects, linking projects to each other or de-linking them,
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and delivering the project's output t o the clients which often causes problem in soft projects, and, of course, concerning human resources management in all its aspects.
Activity systems in temporary organizations Lundin and Sijderholm (1995)have described the structure of projects from an organizing perspective and labeled their concept the temporary organization. Four concepts were introduced in their seminal article that served t o separate the temporary organization from other organized settings - time, task, team, and transition. Time was seen as an essential distinguishing feature of temporary organizations. The very fact that projects were by definition "temporary" indicated that this aspect of their existence was of fundamental importance. In fact, in the figure summarizing the interrelatedness of the concepts, time was placed at the center. The authors saw these four concepts as defining a space, or arena, in which action occurred. Soderlund (zoooa) has extended the typology of temporary organizations t o include employment and structure stability. In terms of this typology, the more interesting ones would appear to be the ones in which employment with the parent organization is "permanent," but structure of any given group is temporary, i.e., the project organizing quadrant of his matrix (see also Adler, 2000). In their theory of the temporary organization3 Lundin and Soderholm (1995)largely left the structure of temporary organizations unspecified. They discussed instead a generic "team" as a temporizing structure devoted t o task fulfillment. Two concepts were associated with these teams. They were task fulfillment and the relationship between the team and its environment. Commitment t o the task was essential, whereas legitimization was cited as being a key element in the relationship with the environment. Project teams would normally be of greatest interest in projectification discussions, and in fact, project ' This theory has served as the basis for much of the prolect-assoc~atedwork of the Scandinavian school of project studies. At the Calgary meeting of IRNOP in 1998 seven of the nine papers on the trmporary organization cited this work (Hanman et al., 1998). It is interesting, however, that in a lecture t o one of the author's (TLW) courses Professor Lundin (2002) stressed it was "a" theory, not specifically "the" theory. He thus left open the possibilities for redevelopment o r modification. Perhaps this book will take some steps in that direction.
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handbooks were cited as background sources for information on motivation, communication and commitment building. Task forces and cross-functional teams would fall within the provisions of this definition, but command groups and self-managed work teams generally would not (c.f. George and Jones, 2002, 324-325). A point that we attempted to stress in an earlier paper (Anell & Wilson, zooob) is that it may not be time that is central to temporary organizations, but perhaps transition. That is, the action that these organizations bring about is central to their reason for being. In so far as regeneration projects are concerned, this argument would seem especially relevant. One conclusion from the literature on organizational change and on specific change models, such as business process re-engineering is that most change projects of this type turn out to be failures (Ekstedt et al., 1999, Anell 1998). After the initial programs have finished, the organization has reverted, more or less, to the old mode of operations, which means that once established routines are very difficult to replace. These studies also give hints why so little change or learning occurs. The change programs are often based of an implicit model of the diffusion of contagious diseases. One or a few members take part in training programs or in projects outside their own immediate environment. They are expected to spread the knowledge they have gained to the other members as they come back. What happens instead is that the new ideas do not take hold; they are overrun by the established ways of sense-making and working. Nelson & Winter (1982) maintain that routines have a gene-like function in organizations, that is, the information coded into them allows reproduction. Hence status quo is reinstated. Organizations as well as other social systems have a way of coping with change that means that they adapt as little as possible (Schon, 1971).In other words, they have an immune system that protects them from (most) mutations. In a general sense, we distinguish four typcs of activities in temporary organizations - routines, projects, 1,indblomian action, and boondoggles. Routines and their establishment have been discussed above, and most of the readers of this text will tend to associate temporary organization and projects. The definition of a project in a classical sense presupposes the ability to specify an objective in advance. In many cases, however, this objective can only be specified qualitatively, e.g., an improvement in efficiency or quality. Such activities require feedback from results to indicate what can be achieved. These process-
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es of course can be associated with Lindblom's (1959) classic "muddling through" treatise. Although the original article was written to account of certain aspects of administrative decision-making, these processes apply equally well to certain project^"^ undertaken by temporary organizations. Indeed, a fair number of regeneration projects may be of this type including some reported by Ekstedt et al. (1999) and perhaps some observations made by Gersick (1988). One thing that becomes clear in discussions of projects and project organizations is that not all people are not talking about the same things. That is, the term "project" gets applied in common usage in a manner that does not apply to projects at all. Even more insidiously, the word "project" may be used in the title of a boondoggles, e.g., "Zero Defects - Project I." Projects have clearly specified goals, a time period for achieving them, a team commissioned to achieve these goals with someone clearly in charge and, in commercial organizations, a budget for not only expenditures, but revenues as well. Projects carry with them review mechanisms. These reviews not only monitor technical progress, they monitor expenditures and revenues as well. Projects also are subject to controls. If milestones are not met, either effort or plans must be modified. Projects are a means for getting things done. Projects are best exemplified by the task-oriented, customer-specific activities of business-to-business (B2B) project organizations. Boondoggles, on the other hand, have a title and a source of funding. If a budget exists, it estimates expenditures. Time is not necessarily a scarce resource in a boondoggle unless of course it represents a deadline for spending money. More generally, a time period may be estimated, but it can be extended with proper persuasion. Both technical and financial results are anticipated in only the most general, but frequently glorious, manner. Leadership and organization tend to be nebulous, especially when accountability is called into consideration. Meetings that are held discuss progress in only the most general terms. Because milestones do not exist, control is impossible. Whereas projects are a The term "project" gets applied t o virtually everything temporary organizations do. In a practical sense this practice is understandable. The very tem "projcct" in general usage implies something will ger done. Thus, who in their right mind would say they were planning some Lindblomian action, or even worse yet, a boondoggle? ' Wehster (The American Cullcgc Dictionary) has the following definition for a boondoggle slang: work of little or no practical value.
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means for getting things done, the only thing sure about boondoggles is that they will cost money. Naturally there is a continuum between "real" projects and boondoggles. B2B project organizations depend upon projects for their income. They thus must be competitive in their bids, develop relationships with their customers, and produce the results they promise. Because these organizations receive ongoing reviews from their customers, their projects must be specified in terms of customer understanding and be generally successful. Boondoggles represent wishful thinking. Anyone can get involved in a boondoggle, and the less the experience an organization has in planning projects, the better the possibility of a boondoggle resulting. It should be noted, however, that boondoggles are not the sole responsibility of project initiators. Two parties are required to produce a contract. There must be a funding source as well as a provider. Some of the best boondoggles have "deep pockets," a funding source with infinite resources and little inclination to ask about results. It follows that state and federal governments make good customers for boondoggles. Agencies have budget allocations that require spending, and agency budgets tend to be historically determined. That is, the expenditures from the previous year are used to set the budget level for the coming year. Programs are rarely evaluated. Thus, a timely report is an adequate result of a central government project. Government agencies, on the other hand, do not have sole title to boondoggles. Certainly industrial organizations support their share of boondoggles. Of special interest are those unique "projects" that firms enter into that promise their renewal. It has been suggested that these projects are rarely successful (Ekstedt, et al., 1999, 118). Without a clear definition of a task to be fulfilled and an explicitly defined time limitation, success as it is generally defined could hardly be expected.
Merging of the temporary and permanent Even if the hunt for the one best way to organize has been called off, the hunt for a better way of organizing still goes on. The manifold pictures that we presently have for permanent organizations are perhaps symptomatic of this search. As an efficient way of getting things done, however, setting time and budget constraints for a certain task to be
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completed seemed t o have universal appeal. The social construction "project management" has assumed status as a profession as well as an academic discipline (Packendorff, 1995). At present, PMI lists 24 universities in the U.S. that grant graduate degrees in project management and 19 outside of the U.S. Professionals thus are being educated not only in how to run projects, but how to structure them. Temporary organizations thus appear to be taking on some characteristics of permanent organizations, at least in structure; with professional management available, effectively designed organizations would appear to be closely associated. At the same time, permanent organizations appear to be taking on some of the characteristics of temporary ones. Aside from March's (1995b) observation of disposable organizations, the fetish of some U.S. firms for being one quarter sensitive t o financial performance is well known. In other words, the operation of the permanent organization has become a series of three-month projects in some firms. O n the other hand, some of the flexibility attributes of temporary organizations may be captured in the newer emphasis on flexibility in strategies that appear to be gaining present support (c.f. Economist, zooza, special section: 16-18). That is, if the U.S. model of structure following strategy (Chandler, ~ 9 6 2 then ) structures of permanent organizations would appear to be destined t o be becoming more flexible. In an earlier paper we argued that temporary organizations and permanent organizations were not easily separated (Anell & Wilson, zooob). Specifically, we suggested that employees associated with temporary organizations would carry with them priorities associated with the permanent organizations from which they came or to which they were going. Recent developments in U.S. industry seem t o validate two of these observations. Rather ironically, the two cases were exactly the ones used as examples - an inde p endent audit and a transition audit team. That is, the extraordinary situation existing between Enron and Arthur Andersen as its auditing firm is now epic (c.f. Duffy & Dickerson, 2002). In a conceptual sense, it supports the observation that individuals in an "independent" temporary organization might carry with them priorities from their permanent organization. Clearly, Mr. Duncan, the project manager from Andersen, appeared affected by the $27 million in consulting fees associated with the $z5 million in auditing fees. It also seems relevant that the shredding of evidence may have been associated with Andersen's wellbeing (Eichenwald, 2002). The
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other case we would now cite is Hewlett Packard's merger with Compaq. A merger team has been assembled to oversee that transition. Its dedication toward the permanent organization (our hypothesis) is captured in its "clean team" designation (Economist, zoozb). Further, members of that team will stay with the merged organization after it is confirmed (Lohr, 2002). With regard to learning, it is interesting to note that although questions of learning from projects to routines has received concern (Sijderlund, 2000, 68; Ekstedt. et al., 1999, 124-154),the question of learning from routines to projects is seldom discussed. Both types of knowledge might be needed to improve performance in organizations. We thus would like to reflect on the "learning dilemma" of present theory. It would appear that this concern might be exaggerated. March (1994) has suggested that learning and knowledge accumulation are evolutionary processes. Additionally, he and his co-workers (March et a!., 1991) would seemingly argue that not only does the permanent organization learn from a project, but its competitors would also. Simply put, this philosophy suggests learning and knowledge accumulation are not outcomes, but paths that lead to outcomes. Thus, looking for evidence that a project team has stored its knowledge somehow may be the wrong model in learning and knowledge assessment. The definitions of individual learning are built on changes in cognitive structures, which are difficult to observe and on changes in behavior, which are less difficult to measure (Bjijrkegren, 1989; Ostergren & Miillern, 1995). Translated to organizational learning, changes in cognitive structures might be likened to changes in central common perceptions and values and changes in behavior to changes in important routines (Bjorkegren, 1989). Two types of learning from projects therefore might be surmised. On the one hand, there is learning about project management, i.e., the organization becomes more proficient at running projects. On the other hand, there is the learning to utilize results from the output of projects. An example of the first type of learning could be that the organization grows better at running product development projects, while an example of the second type of learning might be that the organization becomes more proficient at creating new products or product variations. Culture, of course, is important in encouraging team members to share information, and successful project organizations appear to be "good" places to work (Brown & Eisenhardt, 1997). In these atmos-
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pheres interpersonal communication tends to be non-problematic. Nevertheless, the basic challenge in project organizations may not be the transfer of tacit knowledge into explicit knowledge as generally assumed, but the "bumping up" of knowledge one level so that it becomes part of the decision-making process of the organization. Consequently, formal systems are set up to share this information. People who have worked in project organizations know of the weekly-monthly-quarterly-annual-phase reports and review meetings. Management is kept apprised of progress in its important projects. Knowledge is collected and disseminated continuously. It is part of the control system of the permanent organization and complies with the goals set by it. With the adoption of IT technology, this communication becomes wider spread and close to instantaneous. Gates at Microsoft is reported to receive monthly project reports by e-mail and respond in kind (Gray & Larson, 2000). There are a number of successful project organizations that illustrate this point. Lynn (2000) has looked at IBM, Apple and HP with regard to team learning and found that to be a common characteristic among these firms. The processes at Toyota (Sobek, et al., 1998) also have been studied with similar observations. Boeing has enjoyed 8 5 years of success in a competitive aerospace industry (Wilson & Anell, 2001). The organization not only has learned from projects, it specifies a project approach for its vendors and subcontractors.
Reflections Looking hack, economic historians may see these times as a period of turbulence in the world economy. Amidst this turbulence, projects and project organizations have emerged as a means for getting things accomplished. It will be interesting to see what these historians have to say about these times - in particular what they have to say about the use of projects to get organizations to adapt to their environment. We think the various pictures that have been developed for organizations are symptomatic of this period. We see organizational adaptation as an evolutionary process. The nature of evolutionary processes is that some entities, e.g. organizations, will cease to exist. Others will modify and continue to grow. The utilization of regenerative projects is but one option for creating variation, and there are no guarantees that the variation that is created will
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be a useful one. Indeed, there may be just as great a probability that something injurious may develop as something helpful. Nevertheless, it appears in general that permanent organizations have learned from temporary ones and vice versa. At least, permanent organizations appear t o be becoming more flexible and project-based organizations as well as projects as such seem to be developing greater structure. Likewise, permanent organizations might be seen as a flow of transformations from input t o output. That definition appears to engender a picture of integrated temporary organizations - "transformations" being the common feature in each. If one studies projects, it would appear prudent t o utilize the definitions that have been developed for this topic. It is clear that not all so called projects offer opportunities for learning new routines that might be useful for the permanent organization. Certainly, liberties have been taken in the general application of the term. Simply the use of the label by an organization does not a project make. Particularly in regenerative projects there may a good deal of muddling, if not boondoggling. Of course, those team members who are participating in muddling or boondoggling might become more adept at doing it, but the knowledge they import into the permanent organization might be harmful, if not downright dangerous. That is, the organization may become less, not more, effective as a consequence of these activities. A key area of understanding is the interaction that must occur between temporary and permanent organizations. To treat them separately is a severely limiting approach and in our view, it is this area of research that will be the next breakthrough in understanding organizations. Permanent organizations commission the efforts of temporary organizations. That part of the process seems clear. It is the reverse, the understanding of the incorporation of temporary activities into permanent processes, which seems t o be a problem. March's group (1991) has posited that organizations, even their competitors, learn from single activities. Perhaps the understanding of these processes, the focusing up of project organizations, will be the next effort of the Scandinavian school.
On 18 August rqq3 readers of Ostgota Cohespondenten, a local Swedish newspaper, could find the following headline: "Pilot project in Linghem. Library being run privately". The summary on the first page read as follows: "The first private library in Linkijping has opened in Linghem. The Parapraxis Company, with librarian and new 'director' Gun Aronsohn Nordin, takes over a branch of the municipal library. She explains, 'I will serve the residents of Linghem in a way that I think is better than that of a central bureaucrat. he profit from my involvement cannot be counted in kronor och oren (dollars and cents)"'. In the article there is also an interview with the chairman of the Education Committee, the committee that made the decision to grant the contract to the librarian. "Gun is enterprising and committed, and this is a different form for operating a branch of the library". That statement was very true. Nothing of the kind existed. In this article is presented a 'snap-shot' of the 1,ibrarian and her initiative. By following a sole librarian, we meet other individuals, groups and organizations that reflect a number of changes within organizations in working life and business during the latter 1900s. The possible theorekical 'eye-glasses' are many. Here we choose to present the Librarian as an entrepreneur using the opportunities. But her actions taken can also be looked upon as realizing a project. The Librarian (1 will write "Librarian" with a capital "L" and also
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the "Library" she runs with a capital "L" in what follows) submitted a tender for the local branch of the city library where she was working, in competition with the head librarian of the municipality. This was at the beginning of the ~ q g o s i.e. , a time when changes were sweeping over the public sector, of which the library was a part. Her tender attracted great attention, practically created a stir, in the municipality, both among other librarians and the civil servants and politicians who dealt with the tender and decided who was to be granted the contract to be the provider. Even among the most zealous advocates of privatization, her tender aroused confusion (Sundin, 2000). The story about the Library and the Librarian includes many of the key questions of our time regarding organizational change. It is through the latter, i.e. organizations on both the private and public sides, that society, work, business, etc. change. All changes take place within them and through them. There is no business outside of organizations and no public sector that is not accommodated within an organization. In this case it is primarily the municipality as organization, library service as organization and finally the specific Library in question that are of relevance. These units of description and analyses are closely connected constructed by and constructing each other. However - the position of these organizations and the scope of action for the actors are influenced, perhaps even directed, by decisions taken on the national level. Another important precondition, both for the organizations and for the individuals, is history. This is one of the reasons that attention has to be paid to the growth of library activities and to librarians as a group. Over time, the culture of organizations and the identity of occupations and individuals are created and developed. Neither culture nor identity is easily changed. This case touches on several theoretical fields and on reliable ways of describing and understanding society and organizational change. In this article I will focus on a few aspects. Both the course of events and the result are "a child of its time" - a time when the public sector was transformed in the direction presented here. The central distinction between the private and the public sector seem to be far from unambiguous and perhaps obsolete. The municipality in which the Librarian is active is not unique, even if unusually ideologically motivated. The will for change existed throughout the country. The municipal actors sought change. An increased number of entrepreneurs and increased entrepreneurial spirit in
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the municipality were seen as a means of achieving change. An increased use of private companies as suppliers of goods and services, which was unwittingly viewed as the same as entrepreneurship, was encouraged. The surprise that the Librarian's tender gave rise to in the municipality has to do with the fact that librarians and entrepreneurs would seem to be the opposite of each other. The prerequisite of change was to organize the organizational structure of the community inline with NPM (New Public Management)models. The model used in the community had many similarities with projects: restrictions in time, scope and resources. Librarians, whom the article deals with, are an occupational group that can be characterized as a semi-profession. Semi-professions, very broadly speaking, aspire to become professions, and they try to defend their positions and their status. In the present case, two diametrically opposed ways of doing this - that of the Libkarian and that of her colleagues - are examined. This is the point of departure for the discussion of the role of the occupations and the professions in the new political and economic climate. The aim of the article is to present an understanding of the 'Library being run privately' with the concepts entrepreneurfship, projects and semi-professional strategies in an organizational context.
The Swedish public sector The Swedish public sector has been in a stite of significant transformation for a couple of decades. This is the case for the public sectors of other countries as well. Neither the descriptions of the problems nor the proposed solutions are unique Swedish phenomena or unique Swedish innovations. There were, however, clear elements of political ideology in the discussions and solutions, and a driving force in Sweden was the coming to power of some non-socialist governments after decades of social democratic rule. Sdeological inspiration was provided by theories of public choice that were developed in the U.S. in the 1g5os and their application in New Public Management. A fundamental thesis in these was that market mechanisms were best suited to manage the allocation of resources, which entails that the public sector, ultimately under political direction, should be reduced. One means of achieving this was by contracting out. Increased choice for the general public,
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savings in the public sector and innovativeness in the economy would hopefully be achieved. (Blomqvist, ~ 9 9 6 ;Blomqvist & Rothstein, zooo; Deakin & Walsh, 1996; Ferlie, Ashburncr, Fitzgerald & Pettiegrew 1996; Noren, 2001). In this article the Swedish variant of this international phenomenon is examined. Nonetheless, the Swedish, or perhaps Scandinavian, public sector may have certain specific elements due to the great role it has in the construction and maintenance of the welfare state (Esping-Andersen, r99 I ) . It is worth recalling how the public sector is defined in order to understand what this transformation entails. Common ownership is one criterion of the public sector. Others are that it involves areas of responsibility that are in some way common, for example by being compulsory, that it involves areas in which a democratic influence is guaranteed and that it involves areas that should be readily accessible and not run for profit (Ringqvist, 1966). These criteria are sometimes difficult to assess in practice. For example, should the label "public sector" require that ownership, financing and provision all be public, or would it be enough if two of these criteria were met? Or perhaps only one of them? The difficulty, even arbitrariness, with these delimitations is illustrated by the fact that affiliation with a given sector shifts over time and space. Many of these definitional difficulties are found in the case of the Library and the Librarian.
Changes in the public sector towards a project-oriented model 'What' is transformed and 'why' is a politically charged question, the answer to which varies with one's fundamental political view. There is more often agreement over the descriptions of the problems. Repeatedly it is emphasized that changes in the public sector were and are compelled by problems of finance, management, democracy and legitimacy (Montin, 1996). A number of measures have been initiated and innovative programs adopted throughout the country in order to find solutions to these problems and reform the sector. The goals are often formulated in terms of achieving a more comprehensive democracy, greater freedom of choice, higher efficiency, better service, less bureaucracy and the same or better quality. The means of achieving these formulated goals vary to some extent, but frequently the following are found:
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Decentralization, for example through IodaI units, goal management I and a new managerial role Differentiation, primarily between the political and the operational Marketization, i.e. exposure t o competition, which is presumed t o provide new incentives resulting in economic rationalization as well as new terminology. (Montin, 1996) , The means proposed regularly involve organizational changes. Given political realities, these changes are manifested internally through projects and externally through reductions in activities run under the auspices of the municipality and an increased utilization of so-called alternative providers. Even the use of alternative providers can be looked upon as an extended use of many of the characteristics of projects: A given task, restrictions in time and money and measures for evaluation (Packendorff, r g q j ) . Often the project-term is used for complicated tasks with many individuals andlor organizations involved (see Berggren & Lindkvist, 2001). The Librarian is one person and her Library a small organization. Despite that we can seemany similarities between projects and the way she transformed the task in an entrepreneurial way. The similarities are obvious concerning the social construction of the extraordinary in projects. Size is not the only dimension (cf. SahlinAndersson, 1998).
T h e changed strategies of the muntcipality under study The municipality in which the Librarian lives and works is among those that have most quickly and resolutely adopted changes of the kind mentioned above. One of the leading politicians in the municipality was also one of those setting the ideological tone on the national level. By the end of the 1980s a decision was made to undertake a complete review of the activities of the municipality with the aim of achieving economic savings, changes, etc. A consdlting firm was comrnissioned to assist in the work, which was headed by an inter-party executive group. Work was intense during the whole of rgqo. At the beginning of 1991 the municipal council adopted principles for what the new organization should look like. One of the consultants was appointed project leader with the task of implementing the ideas. O n I January 1992 the changes formally came into force.
ELISABETH S U N D I N
Before the reorganization the municipality operated in a traditional manner, with a large amount of preparatory work being done in the 24 municipal committees. These were partly specialized and partly structured on the basis of geographical principles. Civil servants were linked to the committees on the central level, at the municipal office, and out in the field. Thus the head librarian, for example, was viewed as belonging to the Education Committee and vice versa - the head librarian viewed politicians in the Education Committee as defenders of the libraries. In this way, ties within various sectors arose. In the inunicipality there is one main library and about 10so-called branches located in different parts of the municipality. The Library under study is located in a community about 10 kilometers from the center of the municipality. With the new system, a purchaser-provider model was adopted. The main features of the model are: The municipal organization should be divided so that two different roles clearly stand out. One is the role as purchaser. The other is the role as providerlproducer. The two roles are to be separated organizationally. Political direction is to be exercised by the committees doing the purchase and entering into contracts with the providers. (Minutes of the meeting rqq I-02-12. Linkijping Municipality. Dnr 87.5 54)
A result-unit model introduced earlier was used also after these changes. The model can be described as an intensified use of projects. For ideological reasons the leading politicians in this municipality preferred non-municipal providers. Employees going into business within their previous fields were particularly appealing to the politicians. They imagined a strong desire among the employees to go into business on their own and to free themselves from "the yoke of the municipality" and find an outlet for their creativity and innovative capacity. To encourage this, those in charge of business in the municipality arranged for information on and training in "starting your own business". In general, these efforts met with limited success. National and international companies quickly became the most prominent new providers, for example in the fields of cleaning and elderly care (Sundin, 1997). However, one of the exceptions was the Librarian. She submitted a tender for the branch of the library where she was head librarian.
REGENERATED PROFESSIOh-ALISM
Entrepreneurs and librarians The intention of the municipal representatives, as mentioned, was that employees would go into business on their own. In that respect, private business was equated with entrepreneurship, i.e. form with content, something that is very common in public discussions. 'Entrepreneur' and 'entrepreneurship' require an element of innovation. In the Swedish National Encyclopedia key words, such as "concrete action", "path-breaking methods", "innovativen and "experimentingn and "risktaking", are referred to. These are characteristics that are also found in the scientific literature on the subject (Chell, 1991; Landstrom, 2000). In addition, it is often said that entrepreneurs have a strong drive to be on their own, to be their own boss. Many of those who run their own companies are not particularly innovative, and their activities are in no respects path-breaking. They are not, according to the definition, entrepreneurs. Many studies have been conducted on what gets people to go into business on their own. The results can be described as being analogous to what has been observed when people radically change their lives in other respects. There are so-called push reasons and so-called pull reasons (Sundin & Holmquist, 1990). People transforming themselves from employees to owner-managers could belong to both these groups. A person going into business on his or her own due to a presently poor situation has push-reasons. Enterprise motivated by unemployment is a typical example of this. Pull-reasons, like really wanting to be on one's own, are positive reasons. These are the reasons that are usually attributed to entrepreneurs, and it was reasons of this kind that the municipal actors thought existed and wanted to encourage. How do librarians fit into these expectations?
Libraries and librarians Swedish libraries are considered to have an important place in the hearts of the Swedish people. They "are loved by all, in principle", according to the preface to FRN's (Forskningsridsnamnden - the Swedish Council for Planning and Coordination of Research) publication on "The library as service company" (Biblioteket som serviceforetag. Kunden i centrum) from 1992. In their present form, primarily muni-
ELISABETH SUNDIN
cipal, libraries are a relatively new phenomenon. This form was not fully implemented until the 1960s. Previously there were parish libraries and libraries run by popular movements. Library science became an academic subject with a clear occupational orientation at the beginning of the 1970s when the School of Library and Information Science was founded. Before that, librarians were sometimes the local elementary school teacher or upper-class women who worked in their spare time (Olsson, 1991; Aberg, 1979). The local elementary school teacher was usually a man, and upper class women were, obviously, women. Thus, the work of' librarian has not had as unambiguous a femalc gender label as it does today. Entrepreneurship, on the other hand, has a male gender label (Jonson-Ahl, 2002; Sundin, 2002).
According t o AKU 2001 there are presently almost 7,000 librarians in the country, about 80% of which are women. The percentage of women among municipally employed librarians is even higher. Librarian is a low-wage occupation, considering the long education that librarians receive. Women, as so often is the case, earn less than men and less than nurses and secondary school teachers, two other low-wage occupations in which women are over represented (SCB AWLA Tabell 11, 2000).
The role of libraries is: culture, information and education (Audunson, iyy5). "This conception of the library as a universe of knowledge is deeply rooted in the self-understanding of librarians". The idea of general education seems t o live on, something that can also be seen with the Librarian. As a group, librarians have been the bearers and advocates of a democratic view of culture. A part of this has been felt by many to mean that libraries should he owned, administered and run by the public sector, that they should be a part of the modern welfare state. Profit and other economic concepts do not fit in well with that self-understanding and characterization (Sundin, zooo). Librarians have a strong belief in the importance of their own work, something that is considered t o characterize professions. Librarians meet several of the other general criteria for professions as well: they have an approved academic education, they hold the leading posts within their sector and they have their own culture. Other criteria for professions are not met by this group. Among those are not being in control of their own sector - there are libraries that are run without librarians and library activity that is "thrown together" with other activ-
REGENERATED PROFESSIONA1.ISM
ities, such as recreational facilities. All in all, I find it apt to refer to librarians as a semi-profession with intimate knowledge in their field and a strong occupational identity (Etzioni, 1969; Hagerlind, 1991; Selander, 1989). Librarians are often described as devoted t o their occupation and their work. As a rule, those who become managers and are put in charge of economic matters see themselves in the first place as librarians. This leads to a task-oriented organizational culture and attempts t o remain aloof from strategic and economic considerations. Such considerations are considered t o be narrow-minded and an obstruction t o the work of bringing culture t o the people (Egerdal, 1992). From this follows that librarians according to Egerdahl describe themselves as "passive, introverted, obedient, humanistic oriented and interested in cultural". He adds that as "a trade group they are really on thin ice in terms of management ability, drive and organizational talent". Given such characteristics, librarians have difficulties promoting themselves and marketing their activities. The activities are also very difficult to evaluate. They are typical non-profit organizations that are difficult to conceive of making a profit. They seem to lack what is necessary for adopting a result unit type of model. In the quotation from Egerdal ( ~ q g z )as , well as from others, the characteristics of librarians would seem to be the direct opposite of entrepreneurial characteristics and, moreover, of male characteristics. However both the Librarian and many of her occupational colleagues work for and in their libraries in a way that has to be characterized as innovative, i.e. entrepreneurial. A devotion and love of the library is a strong force. This is considered to be one of the strengths of the professions, and it is found among librarians. Libraries are and have been located together with other recreational facilities, like sports, in some communities because they are seen as variations on the same recreational theme. To the librarians there are unique and valuable characteristics of libraries which can be threatened if libraries have t o cooperate or compete with recreational activities.
ELISABETH S U N D I N
Why the librarian went out on her own Why did the Librarian submit a tender for her library? She was already managing her branch of the library and could, therefore, make a lot of decisions. (It should be pointed out that this branch is small. In terms of number of people, there are approximately two full-time positions the Librarian and two others on a half-time basis). This is one of the reasons given by many of her colleagues at other branches for not submitting tenders. Another strong reason is ideological. Most of her colleagues are of the opinion that libraries should be run under the auspices of the public sector, as was discussed above. The Librarian drew a different conclusion. Why she did so will become apparent in the following section, where we follow the Librarian's thoughts about working conditions and changes in the municipality. The changes in the municipality outlined above had the aim of making operations better and more efficient. However, the Librarian, as the majority of her colleagues, felt that the results were the exact opposite. It is important in this context to note that the reorganization took place at the same time as cut-backs were imposed. The municipal library was to reduce its costs by 20%. The demands for savings would have been devastating for the Library. Operations were already so limited that it could not bear further reductions. The politicians in the local council district agreed with that assessment. The Librarian tried to reduce the costs of the premises by cooperating with the local school, but she felt that all of her efforts were thwarted by sluggishness on the central level: "Premises that I had managed to find slipped out of my hands". She felt that she could not continue under these new austere conditions. "Had I not felt so constrained, I would probably not have submitted a tender". It was not only the cut-backs that created problems but also the new organization. Many decisions were decentralized but central management and control increased at the same time. This is how the Librarian describes it: "I was not even entrusted to write an invoice. And I was so used to doing my own budget.. . I received orders that I did not have the authority to sign an agreement. I was only allowed to work out agreements, but then they would sign them". This description fits in well with Czarniawska's account of "the paradoxes of the public sector" (Czarniawska, 1992). She formulates one of the paradoxes as being precisely "that in order to decentralize, it is necessary to centralize".
REGEKERATED PROFESSIONALISM
The Librarian displayed typical entrepreneurial characteristics. She wanted to be her own boss and control her life and her work. The possibility of submitting a tender was a result of the new policy of the municipality - but that the Librarian judged it necessary to do so was also a result of the new policy of the municipality. The increased freedom that was supposed to follow from the new models, led, in practice, to a lack of freedom, in the Librarian's opinion. In order to be able t o continue working with what she considered to be most important, library activities, she submitted a tender for her Library. For the same reasons, her colleagues refrained from doing so. To them, libraries belong, by definition, to the public sector and should be operated under the auspices of the public sphere. These differences are important and are below analyzed with Soderlund's (zoooa) typology.
Shifts in practice The invitation to submit tenders was preceded by a specification of conditions from the politicians in charge of procurement. The period of time for submitting tenders was short, and the decisions were made late. Everyone involved complains about this leading to short-term thinking and risks of discontinuity. In addition to the Librarian, the municipality also submitted a tender via the head librarian. The tenders differed not only with regard to price but also with regard to the content of the service to be offered. The Librarian wanted very much to have a branch in a nearby village, which would be more costly. After some discussions and a certain amount of turbulence, the Librarian's proposal was accepted -however, she had been forced to "give in" on the issue of the branch. The formulation of the contract follows the characteristics of projects; time, money, aims and means. It was stated what services were to be offered to the general public at the library and in conjunction with the library as well as under what conditions. In the conditions there was no mention of the work having to be performed by trained librarians. (The demand for occupational training is, however, mentioned in relation to schools and childcare). What is to be offered through the library are books and media services and activities designed to promote reading. In her tender the Librarian specified various target groups, such as childcare and a book service to nearby villages. Among the con-
ditions, for example, are opening and closing times. It can seem as if the conditions do not leave very much leeway for innovation and creativity. In the tender the prices of the services offered are specified. The periods of time for inviting tenders roughly coincide with election periods. The follow-up of whether the terms of the contract are being adhered t o takes place both formally through reports submitted and informally. Both the village where the Library is located and the municipality are so small that rumors of possible problems spread. In this case, the other librarians in the municipality also act as "watchdogs". When the Librarian won the contract, her Library was removed from the area of responsibility of the main librarian. This is a consequence of the result unit model that was implemented. However, this is simpler in principle than in practice. A number of problems involving lines of demarcation and questions that had not been anticipated arose. Would the Librarian, as had been the case previously, get access to the book collections at the other libraries in the municipality, and, if so, on what conditions? Who would pay for the transportation of books when borrowers at the Library wanted books that had t o be brought from one of the other libraries in the municipality? Would the Library be included among the municipal libraries listed in the brochure of the main library, and, if so, who would pay for this? Certain practical problems followed directly and indisputably with the new regime. Insurance had t o be acquired, alarms installed, bookkeeping arranged, etc. The Librarian also began looking for new partners t o collaborate with in order to increase the volume of purchases and trying t o attract new readers and visitors to the Library. The latter was done in a number of ways - by cooperating with schools, daycare centers, medical centers and the local swimming pool. Some of the decisions that were taken and measures that were implemented by the Librarian had the aim of decreasing costs. It should be remembered that among the motives the municipality had for resorting t o alternative providers were and are economic considerations, i.e. there was and is a desire t o keep costs down. In order to bring about lower offers in tenders and lower costs, modifications of existing activities are generally required. The Librarian tries to reduce costs by reviewing each specific expenditure. She is on the lookout for favorable contracts for everything: for purchases, for transportation, for bookkeeping, for cleaning, etc. She always considers performing duties, like
REGENERATED PROFESSIOKALISM
cleaning, herself. The difference between what the municipality believes is acceptable service and what she can achieve for the agreed upon amount provides increased leeway for her andlor a better economic result. The Librarian was already established in the local council district when she submitted her tender. She was already cost conscious and devoted t o the importance of good books. The relationship between costs and activity has become more evident t o her than it was during the municipal period. There is a direct relationship between "smashed" windowpanes and the size of allocations for books. She tries t o pass on that insight to residents. She cannot ask for more money with reference t o such incidents. However, the question is whether other librarians in the new economic situation can do so either. Even among them cost consciousness has increased significantly over the years, promoted by the established result unit model. However, the Librarian claims that having won the contract provides a different feeling: a feeling of being on one's own. This is the crucial difference between then and now when it is expressed in concrete terms, even though it is so profoundly abstract. Other librarians also refer to a feeling - but then it is a feeling that libraries should be something in common, something within the public sphere, the common sector.
Shifts in theory The Librarian was not the only one to find herself working under new conditions. As has probably become apparent, this was the case for all of the other librarians as well. They were not only affected by demands for decreased costs but also by demands for re-orienting their thinking regarding what the relevant organizational unit is for them. Each library became either its own result unit or became part of a result-unit that was otherwise a school, daycare center, or recreational center of some kind. Librarians were now to orient themselves toward the resultunits. This was completely foreign to most of the librarians. In their professional way, they saw their responsibility as being broader and oriented toward the reading public in general. The new organizational model demanded new ways of thinking challenging prevailing cultures and replacing them with a uniform one characterized by economic criteria. The demands for change involved
ELISABETH SUNDIN
professions, such as architects, semi-professions, such as librarians who are discussed here, and other occupational groups, such as cleaners. (On the architects in the municipality, see Sundin 1995. and on cleaners in the municipality, see Sundin and Rapp forthcoming). Prevailing values and conceptions of identity among librarians were considered to be obsolete and inade q uate for the new economic situation and the new organizational model. I view identity here as it is used in modern organization literature: "an abstract view of that what is seen to form the consistency and continuity in a person's, a group's or an organization's activities" (Aurell, 2001; Sahlin-Andersson, 1994). Paradoxically, it seems to be the Librarian who went into business on her own who has been most successful in preserving her professional identity by creating the opportunity to perform her mission in most significant respects as she did previously. She succeeded through using the organizational forms implemented in an entrepreneurial way. I have observed the same conditions with respect to other occupations and professions working in the public sector. By operating an activity under private management, the activity can be protected from demands for change on the part of large organizations (Sundin 1997).
Which librarians are innovative, entrepreneurial and victors? In conjunction with the brief presentation of entrepreneurial theories, it was emphasized that running a business on one's own is in no way the same as creativity and innovativeness. The case that has been presented here may appear to support this observation. The Librarian went into business on her own in order to be able to continue with what she thought was most important and best - spreading knowledge and culture to the residents in the local council district where she works. However, the means she chooses for realizing these goals are innovative in that they are at odds with the image librarians have of themselves and their norms regarding how libraries should he run as well as the image others have of what librarians are like. She is innovative with regard to form but conservative with regard to content. From a project-typology borrowed from Soderlund (1998)we could distinguish the differences between the Librarian and her colleagues to a structure dimension. Both are committed librarians convinced of the
REGENERATE^
importance of "libraries t o the nent, but they put different em] the librarians emphasize the im nent, meaning publicly owned, and temporary solutions as Ion tity. These differences are label versus project organizing and he ected t o each typology. To the bureaucratic andlor clan contr fessional and/or clan control. happened in the community st1 The observations and discu entrepreneurial theories and ho true to the reality of today. Thc use the project form in line wit do that as she is "protected" b values. She is accepted by man; rian. The resistance towards ot pact. Classical entrepreneurial 1 text prior to the development c theories that categorize reason into push reasons and pull reasl sented but in an unexpected w. tender for her Library can be : ble situation - not due t o her c made the decision hecause she 1 to be able t o work as before t i ty. For others the desire t o rerr The tough economic conditio municipality. Private alternative perceived as a greater threat 1 reorganizations. These librariz "Privatization is in principle w on a non-profit basis". With ti than remaining within the pub activity there. This opinion is the camp of advocates of prival vatization" either. As expressec "I would still think twice. or t
I
PROFESSIONALISM
)eoplen, their partic~pationis permaasis on the structurd. The majority of ~ r t a n c eof the structure being permavhile the Librarian is positive t o new as it is in line with Her librarian idenI by Soderlund pernianent organizing rgues for different cohtrol forms conn:rmanent organizingttype he connects and to the Project organizing a pro:I this seems to be in line with what ied. ions above should e integrated into ,fully contribute to niaking them more .ibrarianYsentreprenkurial action is t o her visions of a good library. She can her (semi)-professional belonging and ~f her colleages as sHe is a good libra:r providers of library-services is com:ories emanate from a time and a conthe welfare state. Tfie variant of these for going into business on one's own 1s are useful in relation t o the case pre. The Librarian's dedision t o submit a :n as her being forced by an impossiliking her work. O n the contrary, she :d her work so mucd. It was the desire r drew her away from the municipaliIn within the p b l i c sector is decisive. "push" them even harder into the in whatever way they are defined, are xn the poor municipal economy and s feel, very simply, that is it wrong. ng. Certain things sAould be operated t attitude there is ncr other alternative : sphere and "fightidg" for one's own ared by some politiLians deep within ation. They cannot imagine "pure pri~y one of the non-stkialist politicians: ,ee times, about what consequences it
d
could have... there are differences in principle between different activities". Many also openly express a fear that the initiative taken by the Librarian will begin a process from which there is no turning back. "What will happen if people start submitting tenders for each other's libraries?" The Librarian who went into business on her own illustrates the difficulties that are discussed in the literature attempting to describe and analyze what the transformation of the public sector really entails. It seems as if Barbara Czarniawska's (1992)conclusions about the paradoxes of the public sector, which were mentioned above, are just as applicable now as they were ten years ago when they were written. Decentralization, for example, which was effectuated through a result unit model, was implemented through centralization. This also means that small organizations, such as the Library, and small organizational units, such as the other branches of the library, are subordinated to larger ones, such as the main library. An increased number of small alternative providers is not a clear sign that the position of small organizations has been strengthened. It can just as well mean that the large organizations are splitting potential opposition into many smaller organizations.
Hereafter The new principles for management and procurement in the municipality affected all of the librarians. They were all put in a more constrained economic situation. However, they dealt with this in different ways - the Librarian by using the project form as a construction of an entrepreneurial possibility, others by resisting in both the participation and structure dimensions. What are the implications for the future of these strategies - mainly of the strategy of the Librarian? The Librarian who went into business on her own had worked within her occupation for many years when she submitted a tender for her Library. She knew what libraries were and she knew what she wanted to do with her Library. What she wants corresponds to what her colleagues want - they are all part of the same tradition. There is no difference to be found in that respect. The major distinction involves who should be in charge of libraries, i.e. form rather than content. The majority feel that libraries are and should be synonymous with publicly
R E G E N E R A T E D PROFLSSIONALISLV
run activity. The Librarian feels it is the activity that is of central importance - not the form in which it is operated. Her professional participation and commitment is permanent, the adequate structure can be ado p ted to the circumstances. She does see certain advantages of being on hcr own -however, these involve a feeling, not the work or the attitude toward borrowers. For many librarians the public employer is a part of the nature of the occupation and, consequently, of one's own identity. For these people, public ownership, which is strongly associated with profit or rather the lack of profit and economic incentives, is of central importance. It is a part of the occupational identity. Interestingly enough, it cannot be said that the union as an organization had a negative view of the initiative taken by the Librarian. She was herself active in the union. It was rather the occupational group with reference to professional criteria that was most vocal. Librarians unquestionably display professional features - they borrow their frames of reference from each other and, thereby, obtain their legitimacy from each other. O n the central question in this article, that of under whose auspices the activity should be run, the Librarian is relatively alone in her view. With the concepts introduced above; she is the only one to disconnect participation from structure. Or rather, she is alone in accepting the practical consequences of her view - others who, like her, emphasize the unique aspects of libraries are unable to ignore the significance of public ownership - to them structure is as important as participation. The opponents to the Librarian sometimes argue by decreasing the differences: "What is really private with the Librarian's library?", asks one of the other head librarians rhetorically. All libraries, even the one run by the Librarian, receive all of their revenue directly from the taxpayers. The content of the activity is the same and, thus, the costs are of a very similar nature. To classify the Librarian's activity as private and other municipal libraries as public is, in many ways, difficult to justify. Despite that the majority of librarians fear the consequences of the Librarian's initiative. Her small initiative has implications of big institutional changes. The Librarian and her colleagues are examples of a development that we, probably, are going to see more of. The new management and control systems that are applied by large organizations are going to split the semi-professions and perhaps even the professions. The identities of groups and individuals are being shaken. There are many signs that the librarians, as a group, can be the major losers in the negotia-
tions to follow in the tracks of the new municipal regulations. The new organizational models and management systems are a threat to the librarians. We have seen, for example, that librarians are being replaced by recreational directors, that the specification of conditions does not contain requirements that there be trained librarians, etc. This has been possible because librarians have not achieved the position of a profession and, thus, do not have the legitimacy to dictate conditions for procurement. Neither have they managed to describe their competence in concrete and convincing terms to decision-makers. As a result, they are not seen as indispensable. By presenting her project the Librarian handles a tool of change for institutional change of great significance. By means of the Librarian who went into business on her own, a picture was presented of how an individual acts in order to deal with changes that "befall" her as a result of decisions taken by a large organization. We also saw examples of other librarians acting in a completely different way. The differences are due to the possibility of making several interpretations of the historical legacy and the professional identity that developed as a result. The case is also a clear example of how political decisions andlor decisions taken by large organizations have direct consequences for the work and lives of individual people as well as for the identity and negotiating strength of groups. Those changes that took place also entail that established ways of viewing societal phenomena may need to be revised and, consequently, even social science theories. That the actions of large organizations influence the lives of people is nothing new. One of the circumstances that is new this time, and that the libraries and the Librarian are a part of, is that the public sector is contracting after a relatively long period of expansion. Another thing that is new is that there is an attempt to transfer the logic of one sector to another on the basis of political decisions. These seemingly abstract changes influence the everyday lives of individual people - in this case the everyday lives of the members of the occupation more than the everyday lives of the citizens, at least so far.
ementarities in
TOMAS M U L L E R N
Introducing the theme of innovative forms of organizing It is a common practice when writing on management issues to sweepingly characterize the world as changing. From a rhetorical standpoint the rate and direction of change, be it globalization, de-regulation, or technological breakthroughs, is described as 'proof' of the need for renewal in the single corporation. New management models and practices are developed t o deal with these changing conditions, with the intent of creating more flexible, agile, and innovative organizations. This particular way of arguing has produced a wide variety of classic texts. Modern writers on management issues such as Ghoshal & Bartlett (1qq7:g) put this logic in the following eloquent way: The last visit of Halley's comet [in 1986, authors comment] coincided with the convergence of several important environmental forces that were forcing most companies not merely t o adjust or adapt as they had in the past but to confront the need for major transformational change.
The invention of new management models is by no means a new practice. When Henri Fayol in his Administration Industrielle et G6nCrale reflected upon his own experience as a manager in a French company, he launched ideas like the unbroken chain of command and the principles of planning and control that have inspired coming generations of management writers. Though the literature is older than Fayol he joined an unbroken and never ending parade of 'new' models and concepts of managing and organizing. With some historical perspective we soon realize that ideas have a history and usually a long one. And this goes both for the rhetorical underpinning of the need for change, as well as the actual presentation of the change ideas. In fact, 'good' problems are highly useful and they tend to outlive the new models and concepts. Hcre is Norman Angel1 in a quotation from r 9 r r : The world economy has become so highly interdependent so as to make national independence an anachronism, especially in financial markets. This interdependence is being driven by science, technology and economics. And compare this to a quotation from 1999 in a speech by Lou Gerstner from IBM: But my message today is that the real revolution is not about technology. It is not about a new model of computing based on the Internet. We are witnessing nothing less than the rise of a new economy - a digital economy - and a new global medium that will be the single most important driver of business, economic and social change in the coming century. The technology (Internet) is new but the rhetorical figure remains basically the same: new technology creates a need for change. In this chapter further consideration is given to the quest for organizing in companies to adapt to continuously changing conditions. The informed reader should be well acquainted with the more fanciful labels currently in vogue in the search for the holy grail of organizing, be it organizational forms like networks (Nohria & Ghoshal, r997), cells (Miles & Snow, 1996), and virtual corporations (Davidow & Malone, ~ q g z )or , management concepts like regenerating strategy (Hamel & Prahalad, 1994) and knowledge management (Nonaka & Takeuchi, 1995). But what is true and what is false in this ongoing discussion on management
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and organizing? And how do we move beyond the totalizing and deterministic rhetoric of Ghoshal & Bartlett in the quotation above? This chapter draws on recent research into new and innovative forms of organizing and develops a frame of reference that is applied to two cases. The first case is a Swedish high-tech firm in the defense industry - Saab Training Systems - renowned for its consistent implementation of a team-based structure and a strong focus on HR-issues (including an elaborate incentive system and a strong focus on learning). The second case is the network giant - Cisco systems - with a special focus on the implementation of the global network model in Sweden.
Building the argument Recent research shows that nothing remains the same in the world of organizing. The large research program Innovative Forms of Organizing (INNFORM), led by professor Andrew Pettigrew at Warwick Business School, has empirically documented far-reaching, though not radical, changes in European, Japanese and American companies. In a large survey sent to a random sample of 3.500 companies with more than 500 employees in Europe (subsequently replicated in Japan and US) Pettigrew et al. presented consistent evidence of changes in three broad areas (Pettigrew & Fenton, 2000; Pettigrew, Massini & Numagami, 2000; Whittington, et al., 1999). The first area, structural changes, describes changes in the number of hierarchical layers, decentralization, and the adoption of projectbased structures. In the INNFORM-survey, changes from the beginning of 1992to the end of 1996 were described. The second, changes in processes, covers phenomena like horizontal and vertical communication, new HRM-practices, and investing in information technology. The third deals with changes in boundaries, and it describes involvement in strategic alliances, outsourcing and core competence. In the three areas of the INNFORM-survey, the most far-reaching changes are found in the areas of processes and boundaries. In the structural category, the increase in project-based organization is more noticeable with 5 I per cent of the organizations indicating changes in that category. In the process area, 74 per cent of the organizations indicate changes in horizontal linkages (including issues like sharing of R&D knowledge across units, joint prchasing and shared marketing
information). An even more marked trend is the adoption of information technology with 8 2 per cent of the organizations indicating changes in that category. Clear changes were taking place in outsourcing and strategic alliances, in the boundary area, with 65 per cent of the organizations showing changes in both categories. An important result from the analysis of the survey data is the case of complementarities. The majority of the organizations responding to the survey make changes in one or maybe two of the three areas, and a few companies indicate the full multidimensional raft of changes in all three areas. The 4.5 per cent of the organizations doing that enjoyed a performance premium of more than 60 per cent, showing that it produces negative results to get involved in partial changes. The complementarities argument emphasizes the systemic nature of the new, emerging organizational forms. It elaborates on the concept of fit in contingency theory (Donaldson, 1996) and the notion of holistic and aggregated organizational forms in the configurational approach of Miles & Snow (1978). It explains the configurational approach by asserting that doing more of one thing increases the returns t o doing more of another (Milgrom & Roberts, 199s). As maintained by Whittington et al. (rgqg), the performance benefits of one set of changes is dependent on other complementary changes. Based on the results of the INNFORM-survey and a number of casestudies carried out in European companies, relevant changes - boundary crossing and temporary forms of organizing - need further expounding. The stress that the changes are related can be traced back to the complementarities argument above, and it will be further developed and discussed in the case analysis below.
Boundary crossing Several authors suggest that the multidivisional form is being superseded by the so-called network form (Nohria & Ghoshal, 1997). A key characteristic of the suggestion is the tendency to move beyond the boundaries of the single corporation and develop more elaborate and complex value constellations. The often discussed contemporary phenomena of external networks, alliances, virtual and imaginary organizations, etc., are all elements in a process of changing/dissolving the single, unified organization as the central locus of interest. We see a
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marked trend of companies performing increasingly important activities in relations with customers, suppliers, and even competitors. In the INNFORM-survey this was evident in the figures for strategic alliances and outsourcing. In this respect the whole concept of an organization with clear boundaries becomes problematic. Even though few companies take the full step towards building a virtual corporation, the trend towards more open, boundary-crossing forms of organizing is evident and clear. The label boundary-crossing indicates that the boundaries are still there but they are crossed to a larger extent. The casestudies performed in the INNFORM-project verify the picture that companies reach out and engage in different external relations at the same time as they keep a strong focus on the internal operations. Striking a balance between the company's external and internal priorities is the most important issue. This marked trend towards boundary-crossing creates a need to rethink traditional, functional and divisional forms of organizing. Network characteristics are more conspicuous when dealing with the complexity involved in partnering many actors around the core organization. The concept of network organizations highlights a number of important features of innovative forms of organizing. Two important aspects are worth highlighting - communication and learning. The internal network organization is often described as a communicative organization, with the more elaborate and complex systems of communication being a salient feature of the organization. In the INNFORM-survey this focus on communication was evident in the figures for vertical and horizontal linkages where major changes were taking place in European companies. Perhaps even more important is the massive investing in information technology and the break-through of the Internet. And it is no coincidence that the Internet has been the prototype for how network organizations are viewed (Magretta, 1999; Tapscott, 1999).But it is dangerous to treat the network characteristics as merely technologically driven, with close connection to the advances in information technology. The network characteristics are also evident in how we view the management of knowledge and learning.
Temporary forms A central issue in the literature on innovative forms of organizing is the need for building more flexible structures. Driven by the rapid devel-
opment of information technology, and not least the Internet, both the need for and possibilities to develop more flexible structures and fastmoving forms of organizing have increased. A common assumption is that flexibility is enhanced by adopting more temporary ways of organizing. Ekstedt et al. ( ~ q y y )Jessen , (1yy6), Hamilton (1yy7), among others, hold that the new architecture of the modern corporation is t o an increasing degree an architecture of temporary organizing. This can take the form of formal projects, and by paying attention t o process, emphasizing horizontal and vertical networks transcending the single organization, or focusing on the knowledge creating and utilizing efforts in corporations. The literature on new and innovative forms of organizing, and on human resource management, often stresses the use of decentralized, group-based structures. Concepts like team-based structures, project forms of organizing, and organizational learning are often used to describe the features of new forms of organizing. A marked trend in the literature o n new and innovative forms of organizing is the focus on processes and dynamic aspects. From an HRM-perspective, Mirvis (1997) holds that leading companies focus more on organizing for innovation by involving employees, conducting training and mentoring programs, using flexible work arrangements and team-based work redesign. In the field of project management, it is often maintained that companies organized by projects can be an important arena for innovation (Andersson & Larsson, 1998) and learning (Lundin & Soderholm, 1997). The notion of the projectified society, with an increasing number of companies organized by projects or other forms of temporary organizations, draws the attention to processes in companies, how they organize innovation and the on-going business processes. O r t o quote Hastings (1996): The resulting organization can be conceived of as a constantly changing kaleidoscope of teams, forming, delivering work and dissolving as required. The changes towards more networked and temporary forms also has implications on how people in organizations are dealt with. It is often argued that values change and that younger generations appraise notions like freedom, work and authority/responsibility differently than older generations. Together with structural changes in many industries with a move towards more knowledge-intensive production systems and products, the changes in values pose new challenges for recruiting, training and motivating employees. Pfeffer (1998) says that
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the 'management of people' is a crucial and strategically important issue in the modern corporation. Companies are experimenting heavily with new HRM-practices such as new incentive systems, team building, internal labor markets and corporate mission building.
The Saab case This section describes the radical, company-wide, organizational change in Saab Training Systems from 1992 up till 1998. Saab Training Systems is a high-tech defense company, working as a prime mover in the industry when it comes t o organizational renewal. The company is fully owned by the Saab group, a Swedish corporation consisting of a number of high-tech firms. The Saab group consists of 6 business areas and more than 3 j companies (including Saab Training Systems). The group's major product is the fourth generation combat aircraft JAS 39 Gripen. The case focuses on the change from a traditional functional structure to a team-based structure with a number of features relevant to the theme of innovative forms of organizing. Following a strategy of concentration on core competence, the company, as a whole, comprises a number of teams organized in line with the business process. The company has experienced rapid growth in terms of turnover figures, from I j million GBP in 1992 t o jo million in 1997: The number of employees during that period increased from zoo to 260, and at the beginning of 2002 it surged to more than 300. The company's special niche is computer-aided training equipment for military purposes, using visual laser-based simulation of different types of terrain and situations. In the early 1990s the company had trouble meeting important deadlines for production and development. Production and development relationships seemed to be especially crucial for the overall effectiveness of the company. 'We have pointed at the difficulties with development issues, and creating new products with insufficient resources' (Interview with a team-leader). The company also felt a need to respond quicker to environmental changes. The communication between different parts of the company was considered an important issue. The managing director for some time had had trouble with the effectiveness , took the initiative t o start an experiment of the company. In ~ q q zhe with a team-based organization. The underlying idea was t o create a more flexible structure - 'All this requires that we develop new flexi-
ble processes, communication patterns and a new organizational structure' (Interview with the former CEO). The company's new structure can best be described as eam-based. More than 40 teams report directly t o the managing director and the management team. The number of hierarchical levels has been reduced from three t o two. The ideal size of a team, according t o a number of respondents, is 6-8 persons. If a team gets bigger than that it is split into two or more teams. There are some examples of such cell-division among product teams (Miles et al, 1997). The purpose of this organic growth of the organization is to increase flexibility and adaptiveness t o environmental change. When the new structure was implemented in 1992, the five types were given a lot of operational freedom compared to the former structural arrangement. This freedom concerns especially operational decisions in production and development in the product teams. It is balanced by a very strong planning process in the company with business teams responsible for the overall planning and the delivery team responsible for the production planning. When the teambased structure was introduced, the company started an incentive system based both on the overall result, team performance, and individual outcome. This is done according t o an elaborate scheme developed in 1992, under which the performance of the company, the team, and the individual is measured. The team-based organization is structured according t o the basic business process. At the beginning of the business process there are five business teams in the market organization of the company. Each business team is responsible for one or more products, and one or more geographical areas. They are responsible for negotiating and controlling contracts with the customers, and are economically responsible for each contract. When a contract is signed, a production order is placed with a delivery team charged with planning logistics of each order. Besides planning the logistics, the delivery team is also responsible for final testing of the product before shipping t o the customer. The production planning process also involves a purchasing team. This team has a central function with an overall responsibility for purchasing. For each contract, an application team is involved in adapting the company's products t o the needs of the customer. The business team responsible for a contract orders an application from an application team. The application team's study functions as a blue-print for the different product teams involved in the order.
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Design and production of the different units in a project is carried out by one or a number of product teams (there are 14 product teams in the company, 1 2 of them work in the product area of laser simulators). The product teams are organized according to products, i.e. optics, laser-simulators, sensor-modules. In addition to the teams involved in the business process, there are a number of central functions, i.e. personnel, quality, purchasing and finance. Because the structure for an order is temporary, coordination between the different teams involved in an order is very important. The mix of teams involved in an order is dissolved as soon as the system is delivered to the customer. Any product team can simultaneously be involved in a number of different projects at the same time. The responsibility for the process coordination is split between a business team (having the commercial responsibility for each project) and the delivery team (rcsponsible for production planning). Since the business teams and the delivery team do not have the detailed knowledge necessary to place orders with the product teams, they need application teams to define the need for different parts in a system. This means that the application teams fulfill a very important coordinating role in the business process. The coordination needed in production and development processes in the company has forced the different teams to intensify cross-functional communication. Communication has also increased between different teams, especially application and product teams, and customers. The need for more efficient planning in the new team-based structure forced the company to introduce an up-to-date computerized planning system. The system was introduced when the team-based structure was implemented, which has been gradually refined since. The use of IT has grown in importance due to shortened throughput times, and the growing customer need for more frequent contacts. The basic idea behind the team-based structure is to create an innovative and learning organization. The product teams, for instance, are responsible not only for producing their parts but also for construction and product and process development. One reason for building this organization in 1992was to foster a more entrepreneurial spirit. In the word of the managing director 'each team should be capable of becoming their own company'. It should be stressed though that the teams are not profit-centers in the full sense. They are better described as cost-centers, but with a high degree of operational freedom.
The experience from the first five years of the team-based structure shows a need for a project organization of development issues. During 1999, the company moved into a more project-based structure with development issues organized in a project organization. The major difference between the team-based structure and the new project-based is the temporary nature of the project groups formed in the new organization. It should be remembered that a team, though depicted in the literature as a highly flexible organizational structure, is still a form of departmental structure with the teams being organized for on-going operations when compared to temporary operations. The major difference between the team-based structure and the new project-based is thus the temporary nature of the project groups formed in the new organization.
The Cisco case1 In 1984, Cisco, named after the city of San Francisco, was founded by Leonard Bosack and Sandy Lerner, a couple who worked as computer specialists at Stanford University. The company started as a project to connect computer networks on campus. They were first to develop a network technology that allowed networks to communicate with each other. It made linking networks across the world possible and was the basis for the functionality of the World Wide Web. (Killick & Rawoot, ZOOT; Saloner & Spence, 2002; Stockport & Chaddad, 2001; Tempest, 1999). The Internet and Intranets grew in importance and so did Cisco. Cisco's almost exclusive knowledge within this area at such an early stage made it the leader of networking and by 1998 it became the number one supplier of routers and switches. Today, the company's product line consists of a wide range of networking solutions and their core products -routers and LAN and WAN switches. Cisco's wide product range enables it to provide their customers with end-to-end network solutions (Saloner & Spence, 2002; Tempest, 1999). Technological advancements, which cannot be internally developed within six months, are acquired by companies with the necessary
' The Cisco case has been prepared by Johanna Fnglert and Mikaela Graf.
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knowledge (Byrne & Elgin, 2002). In the past eight years, Cisco has acquired 73 companies, using its unique acquisition growth strategy. In order to extract knowledge from the acquired companies, Cisco needed a successful human resource management and an effective integration of new companies without losing intellectual capital (O'Reilly & Pfeffer, 2000).
Cisco has adapted its products and technology to its future anticipation of how the organization should be run in the future. John Chambers, CEO of Cisco, quoted in Morgridge & Heskett (zooo), said that companies not only will connect themselves to a "New World Network", but they will also be faced by changing assumptions connected to competition and the development of organizations. These assumptions are: organizations will be oriented around networks, as opposed to hierarchies, capabilities will be focused on technological advantage, emphasis will lay on the interdependence of partners, and organizations will be built on change rather than on stability (Ibid). All employees within the organization are part of Cisco's networked environment, which gives them a wide range of support systems. The most important forms of employee support are the Internet-provided learning programs. Cisco has an E-Learning Initiative site where the employees can complete various courses and to satisfy the need for Internet-qualified people, Cisco has also founded a network of academies that trains people in subjects such as network basics and troubleshooting. Cisco's employees are connected by the "Cisco Employee Connection" (CEC), which is an Intranet designed to provide information and services. According to Cisco, CEC's benefits are manifold, including instant global communications, enhanced productivity, consistent business systems, lower business costs, scalability, and facilitation of employee acculturation (www.cisco.com, 2002; Rankin & Parent, 1997). "C~SCO Connection Online" (CCO) is a combination of Internet and Intranet applications accessible to customers, partners, shareholders, prospects, and employees. The CCO gives these parties information and services, such as software upgrades, technical assistance, order status, seminar registration, documentation and training. The CEC and the CCO are the contents of what Cisco calls its global networked business model. This model facilitates information sharing, the cultivation of relationships between various parties, increases speed and minimizes costs, which are needed to succeed in a global
environment (www.cisco.com, 2002). In order to describe the Global Network model of Cisco, a more detailed analysis of Cisco Sweden is made below. The empirical material is based on interviews with the CEO, the Information and PR manager and the H R manager at Cisco Sweden. The number of employees at Cisco Sweden is approximately zoo and they are divided into various departments, such as administration, sales, marketing and R&D. The R&D department is one of four in Europe. The others are situated in Italy, Scotland, and Israel. Cisco Sweden is connected to Cisco by the global networked business model, which provides for a close co-operation between all parts of Cisco. For example, the marketing department in Sweden consists of only four people but to help them they have the other marketing departments in Scandinavia, Europe, and the United States. The network is used in all parts of the organization and it is the glue that holds the organization together. Since Cisco is a vast organization with entities in more than 67 countries, the network is an important tool to ensure close co-operation (www.cisco.com, 2002). According to the H R manager, the advantage of working with a network such as Cisco's is 24-hour, seven-day access to all information. This can also be considered a disadvantage since it entails one has always to be available. It is no longer important to be in the office to be reachable. There are no office boundaries and one can be reached everywhere, e.g. at home, abroad, or, of course, in the office. All employees get an access card that works as a key to all of Cisco's offices across the world. It is based on the concept that Cisco is their employer and not the individual entities. It is possible for an employee in Sweden to be reached at an office in England, if he or she happens to be there. A Cisco employee can log on to any telephone or computer and can be as easily reached as if at hislher home office. Innovative technology is one of the most important interests of Cisco. To maintain the technology, knowledge-sharing and cooperation are of paramount importance. This is, to a large extent, done cross-border and, therefore, necessitates the use of the global networked business model. Since Cisco Sweden is one of four R&D departments in Europe, it is part of a matrix from which knowledge is chosen depending on what is needed for the different projects. Cisco Sweden is currently working on a project together with entities in Italy, India, the UK and the United States. This requires cross-cultural boundaries to overcome and maintain a close contact within the project. During the course
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of the project there are various milestones that are set and each entity develops different parts that must be completed at the set date. In order for all parts to be compatible, it is important that information is shared and communication is open. Projects are initiated by requests from customers. When a customer approaches Cisco with a problem, it is most likely that customers in, for example, Germany and Italy will have it as well. The market is the same regardless of the country. The problem generates an idea that the local marketing department communicates to Cisco in San Jos6 where decisions are taken whether to start up a project or not, and if so which entities have the competence and resources needed to develop it. Everything in Cisco is customer-oriented and customer success is the main goal. To ensure innovation and boost creativity, Cisco has a two-person unit that works with compensation and benefits. Cisco has something called CAP awards, which commends innovative employees. Externally, Cisco also has adopted the concept of open communication. Their customers, partners and suppliers are all part of their ecosystem. The partners are connected to the global networked business model and the suppliers are integrated into the supply chain management from design to production, which results in a faster and more efficient production of Cisco products.
Figure
II:I
Cisco's Ecosystem.
The inner circle consists of the Cisco organization, then come partners and suppliers, followed by the customers and software partners. As a service to their partners and customers, Cisco provides online information regarding internally discovered product problems and solutions. The company strives to do this before the problem occurs externally to minimize damages. Cisco also informs its partners and customers of the efficiency benefits that can be obtained when using their products. To ensure that these numbers are correct, an independent accountant firm is hired that provides them with the savings they have obtained due to using their products. The CEO expresses this rare situation as follows: "Networks are something we work with so we take our own medicine daily".
Concluding reflections The two cases described above, though very different, illustrate a number of points connected to the frame of reference presented earlier. In the area of boundary-crossing, the two companies show some interesting features, with the hard-working Cisco consistently trying to expand the network of external contacts. The Cisco Ecosystem, which is a concept widely spread in the company, describes the elaborate network of relations in three layers. The boundary-crossing elements in Cisco are balanced by a very strong focus on the technology, and with a very strong core of the Ecosystem. In the interviews conducted in Cisco Sweden, the respondents verified that the Headquarters in the US work very hard at integrating the different parts of the company. Another aspect of boundary-crossing in Cisco is the open technological standard and the ambition that the Cisco products should work with products from other suppliers. It is not a closed system, one of the respondents said. Cisco is clearly a living example of an internal network organization, with a strong emphasis on IT-tools for running the network. The Global Networked Business Model relies on the intranet CEC and the socalled CCO where customers, partners, and many others can gain access and receive information and services. The knowledge sharing, experience, and open communication are important prerequisites for the continuous innovation needed to survive in a highly competitive industry.
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The Saab case also highlights some aspects of boundary-crossing, though not on the scale of Cisco. The primary element of boundarycrossing in Saab Training Systems is the close and intensive cooperation with the customers. Not only the marketing people meet the customer but also members of the different teams involved in putting the products together. A further step towards extending the capacity of the company was introduced in 1999 with a project-organization for innovation project that could work in closer cooperation with customers. In the Saab-case the strong focus on the business process and the flat structure with all teams reporting directly to the top management team reflects a strong ambition to be more network-oriented. The major difference between the two cases is the way their network models are developed, with Cisco illustrating a strategy to build both internal and external networks, and Saab relying more on the internal network form. A theoretical remark should also be made concerning the boundarycrossing in the two cases. Both companies are far from the ideals of imaginary and virtual organizations, with a small core and an extended external network. In both cases top management deliberately keep a strong control over the company and integrate important functions in the internal hierarchy. They both illustrate a hybrid form between internal hierarchy and virtual organization. The temporary aspects of organizing are very important in both Saab and Cisco. Both companies share the idea of putting together larger teams for both production and innovation issues. In Saab, it takes the form of one or more product teams working together with marketing and application teams for a specific customer order. This specific group of teams is dissolved when the customer order is met. In Cisco, the matrix in Europe illustrates the same basic thinking - to put together the best possible team for each occasion. This philosophy is often used in innovation projects. It should be stressed though the organization is only temporary t o a certain degree. In both cases the internal structure is departmentalized, with each individual employed by the company having a clear geographic and functional 'home'. In both cases we find yet another aspect of time, namely the strong focus on speed. Both companies work intensively with closing the gap between customer needs and final delivery. In the Saab case the need for quicker logistics was the whole rationale for the radical change effort in 1992, and the competitive pressure during the 1990s has further enforced that need. The company has been very successful in improv-
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ing the capacity to deliver on time, but a major challenge is to keep the same tempo in innovation. Compared to Saab, Cisco has been more successful in integrating production and innovation. A comparison between the two companies shows that Cisco has succeeded in bringing together and integrating a vast number of resources all over the globe, buying companies and integrating partners and suppliers in the network. The ability to cross boundaries and integrate different resources in a network model seems to be a prerequisite for building an innovative and flexible organization. Saab Training Systems and Cisco put a lot of emphasis on human resource management, and it is impossible to summarize all aspects of this broad area within the scope of this chapter. However, it is worth highlighting a number of the more prominent features. In the Saab case knowledge management and motivation are two very important pillars of the HR-philosophy of the company. The former CEO developed a very elaborate learning philosophy in the early ~ g g o s with , a strong emphasis on the individual and group-level learning. The basis for the learning philosophy was the idea of experiential learning, where experiments and risk-taking were encouraged. The strong learning focus was also strengthened by a complex incentive system based on individual, group and company level performance. In the Cisco case the integration of new employees and the integration of acquired companies is a high priority within the field of HRM. The respondents in the interviews stress the need to have a 'cultural fit' between the acquired company and Cisco. Though we have not been able to verify the results of this cultural integration, the company has high ambitions, and the strategies are thoroughly implemented. Learning is also a high priority in Cisco and one example of the different tools used for that is the so-called E-learning Initiative Site where the employees can take different courses within the Cisco Academy. The highly developed thinking on human resource management in both companies reflects an important insight concerning innovative forms of organizing. More complex and dynamic forms of organizing, where boundary-crossing and temporary aspects have been highlighted, are usually found in highly competitive and knowledge-intensive industries where people do matter. Both cases confirm the basic premise of O'Reilly I11 & Pfeffer (2000)that companies need to create cultures and systems in which people can actually use their talents for the benefit of the company.
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The boundary-crossing and network-oriented models of organizing and the temporary forms of organizing stand out as important features of the two cases. One question remaining to be answered, though, is the relations between boundary-crossing and temporary forms, and how the complementarities work in the two cases. From a theoretical standpoint the relations between boundary-crossing and temporary forms are obvious. The tendency t o move beyond the boundaries of the single organization creates a need for new forms of organization beyond the internal hierarchy. Projects, and other temporary forms of organizing, are clear answers to this challenge. But this also works the other way round - projects are, by their very nature, cross-functional. By organizing with projects opportunities are created to cross boundaries. We could thus argue that there are important complementarities between boundary-crossing and temporary forms of organizing, and it is no coincidence that innovative organizations keep a dual focus on both. Following the complementarities argument of Milgrom & Roberts (1995)it can also be argued that there are further performance benefits to be drawn from simultaneously focusing on both boundary-crossing and temporary forms of organizing. More specifically the following aspects of complementarities are hypothesized and observed in the two cases:
A close and intensive collaboration with customers requires a project-oriented focus on production, product development and research. The Saab case clearly illustrates how the close involvement of the customers activates different parts of the team-based structure depending on where in the business process a specific order is. The internal network structure of Saab is made more flexible by the team-based structure and the elaborate planning instruments. The team-based structure also helps customers to follow their order through the business process and simplify the communication with key persons in the company. The temporary forms of organizing seem t o be a necessary condition for an extended external and internal network to gain momentum and speed. The innovation projects in Cisco are good examples of this point where Cisco manages to utilize widespread resources t o bring products to market to quickly meet market opportunities. In the Saab case the team-based structure and the network approach
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also allows for a more effective utilization of the company's capabilities. The flat and networked structures in knowledge intensive firms like Cisco and Saab, require consistent and elaborate focus on human resources. In the two cases some aspects of the HR-area were highlighted without going into detail. In the Cisco case learning and cultural processes are two important areas on which the top management deliberately place their focus. The consistent work by top management to communicate core values in the company is arguably an important part of the socialization of different actors in the network. When it comes to learning, the e-learning initiative site is an important instrument in creating opportunities for on-the-job training and continuous development of the employees' competence. More hypothetically the two cases illustrate two stylized forms of organizing - one with an internal focus on building a network (Saab Training Systems) and one with an external focus (Cisco). As described above, the two cases differ in how they manage to draw on the complementarities between boundary-crossing and temporary forms of organizing. The more open approach of Cisco creates possibilities and challenges. We have seen that Cisco, compared to Saab, has managed to keep a more explorative approach to learning, partly by adding to the internal capabilities by buying companies. The major challenges are to keep control over this complex network and manage to communicate between its different parts. When it comes to coordination, Cisco relies a lot on cultural control with the CEO being very active in creating a sense of community in the company. This is further underpinned by the extended electronic network. The approach of Cisco is clearly more risky but can also produce impressive results with tremendous growth. The cases of Saab Training Systems and Cisco illustrates a number of important elements in new and innovative forms of organizing. The two areas of boundary-crossing and temporary forms were used to capture some aspects of the emerging innovative practices. The challenge of organizing is, to a growing degree, a matter of organizing for flexibility under conditions of complexity and change, and both cases show that companies are rapidly adopting a number of network characteristics to achieve that. The Cisco concept of an Ecosystem is a good metaphor for the emerging models of organizing. It illustrates the need to map the complexity
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of the environment, multiply the internal resources by building external networks and enhance learning and knowledge management in the company. Although the two cases are neither representative nor generalizable, they still stand out as a testimony of the widespread and thorough changes in how we conceive of organizing.
Action and the temporary organization In contemporary organizations projects and project management are important issues. This is reflected in the projectification of the firm (Midler, 1995) and that businesses are going on in a world of projects (Lundin, 2000). Traditionally, projects have been described with distinct stages such as development, implementation, and termination (Waters, 1996; PMI standards Committee, 1987). However, during the last decade the "normativism" in the theoretical field of projects has been criticized and there is a need for a diversity of middle-range theories for different types of projects, or temporary organizations (Packendorf, 1995). One alternative to the "normativism" in the traditional project management literature is suggested by Lundin & Soderholm (1995), when they introduce the theory of the temporary organization, which is based on a perspective from the inside of the temporary organization. Lundin & Sijderholm take a point of departure in the criticism against the implicit assumption that decision causes action (see e.g. Thompsson, 1967; March & Olsen, 1y76), an assumption that also seems to be an underlying perspective in theories of project management. Lundin and Soderholm suggest an alternative to the decision-making perspective by using Czarniawska-Jorges' (1988) action-oriented approach, which considers all kinds of organizational performance as different kinds of action. Furthermore, from an empirical point of view, an action per-
B R I D G I N G T H E GAP BETWEEN TEMPORALITY AND P E R M A N E N ( : Y
spective can be motivated by the fact that temporary organizations exist in order to perform a specific action (Miles, 1964; Goodman & Goodman, 1976) to achieve immediate goals (Palisi, 1970). Moreover, if temporary organizations are seen as systems for implementation, action will be an important feature (Borum & Christiansen, 1993). In the theory of the temporary organization, Lundin and Soderholm outline four basic concepts-time, task, team, and transition - and four sequencing concepts - action-based entrepreneurialism, fragmentation for commitment-building, planned isolation, and institutionalized termination. However, in the theory of the temporary organization and other traditional perspectives on temporary organizations, there seems to be a slippage between efforts made in a temporary organization and the transfer of these efforts into a more permanent setting. In cases where tangible products are delivered, this might not be a problem. But in cases where the efforts of temporary organizations aim to renew organizational work routines or organizational structures, there is a need for an enhanced knowledge about the time span between the termination of the temporary organization and the incorporation of the efforts made in the temporary organization into the permanent organization. The need for an enhanced knowledge originates from that fact that it is not unusual that renewal efforts in contemporary organizations fade away, or end up as something that not was the original purpose. This phenomenon is e.g. described in literature that addresses failed IT projects (see Lucas, 1975; Lyytinen & Hirscheim, 1987; Holmstrom & Stadler, 2001). However, in the literature on temporary organizations and project management there seems to be a lack of a conceptual framework that describes the gap between temporality and permanency. One way of approaching slippage between temporality and permanency can be to use concepts from Actor Network Theory (ANT). ANT, which is generally associated with tbe works of Callon (1986, 1987), Latour (1986, 1987), and Law (1986),addresses action and the creation of action. With a few exceptions (see Linde & Linderoth, 2002, 2000; Parkin, ~ 9 9 6 )ANT , is not so commonly used in order to analyze temporary organizations, or projects and project management. But by using concepts from ANT it can be possible to bridge the gap between temporality and permanency. ANT has its origins in studies of science and technology. It is grounded in a fairly simple observation, which social science and humanities
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had ignored until the 1970s. Namely, how science actually is done not how it normatively is supposed to be carried out, and, the way technological artifacts are actually designed and deployed - not how textbooks in engineering instruct us (Monteiro, 2000). ANT is built on the assumption that society (and organizations') is a completely interwoven socio-technical web that consists of a heterogeneous network of actors, inscriptions, work practices, and institutional and organizational arrangements (Hanseth & Monteiro, 1997:185). Furthermore, ANT does not make an a priori distinction between the technical and the social, while the theory was developed to analyze situations where the separation of these elements was difficult (Callon, 1999). Thus, it can be claimed that a temporary organization is an actor network mobilized in order to solve a certain task. Moreover, the network contains actors with different roles and relations, work practices, and institutional and organizational arrangements. Given this background the chapter has two aims. First, Lundin and Soderholm's (1995) theory of the temporary organization will be discussed from an actor network perspective. Second, by that discussion, a basis will be formed to discuss how transition of efforts of the temporary organization can be regarded, in order to bridge the gap between tenlporality and permanency. The further outline of the chapter is organized as follows. First, there is a brief overview of the theory of the temporary organization. This is followed by an introduction of some central ideas and concepts in ANT that can be applied to temporary organizations. Next, there is a discussion of the theory of the temporary organizations and ANT. Finally, there is a discussion about how transition of efforts made in the temporary organizations can be considered by using concepts from ANT.
The theory of the temporary organization Lundin and Soderholm (1995) consider action important in their proposed framework for a theory of the temporary organization. Their suggested framework is built around four basic concepts - time, task, team, and transition - and four sequencing concepts - action-based entrepreneurialism, fragmentation for commitment-building, planned ' Author's rcrnark.
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isolation, and institutionalized termination. The sequencing concepts can be seen as alternatives t o the four basic phases of the project's life cycle as it is described in the more normative literature (PMI, 1987:1ff). From an action perspective, time can explain different acts in the temporary organization such as different activities that are desirable during the phases of the organization's life cycle. Lundin and Soderholm (rq95:440) claim that the temporary organization should: "provide a highly organized way of dealing with time problems and of acting according t o the perception of time as being scarce, linear and valuable." The definition of task is the raison d'dtre for the temporary organization, and it is dependent on a limited number of defined tasks. The task can be repetitive or a one time event. When the task is repetitive, actors know what should be done and who should do it; however, when the task is unique actors do not know immediately how to act (op cit:440). When the team in temporary organizations is considered, the relationship between individuals and the team (participation in the team is time limited) may imply that conflicting interests are accepted. Membership in the team depends upon common interest in a specific task, force, or coincident. The fourth basic concept is transition, which is described as follows (op cit:442): "An action orientation implies that something has to be transformed or changed as a consequence of the existence of the temporary organization, and therefore, these changes are to be achieved before the organization is terminated". The four phases in the life cycle of a temporary organization are renamed by Lundin and Soderholm to focus on the activities of each phase. During action-based entrepreneurialism, the first phase, there is an obvious need for an entrepreneur to initiate the temporary organization. However, the skills of the entrepreneur are different depending on whether there is a repetitive or unique task that needs to be performed. The second step, fragmentation for commitment building, has the following purposes (op cit:446f):
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"it delimits the scope, simplifies the task, and provides a time horizon to facilitate the handling of the task. O n the other hand, it works as a mechanism for securing commitment among potential members of the temporary organization". In this phase, the task is spelled out and delimited, so success in some kind of definition will be achieved. The third step, planned isolation, is the phase where predetermined actions, inscribed in plans, are supposed to be carried out in order to complete the task. In this phase, it is also important to minimize disturbance, which can threaten the actions in the temporary organization. The final step in the life cycle is the institutionalized termination, where one of the essential components is bridging. Experiences gained during the lifetime of the organization have t o be transferred to other temporary or permanent settings. The suggested key to this transfer is individual learning that would bridge the knowledge from the temporary organization into the new settings (op cit: 449f). The model outlined has brought valuable insights to the organizing of temporary organizations by focusing on action. The question remains, however, about how the transfer of results from the temporary organization can be effectively incorporated into a more permanent setting.
Building networks and translating ideas into action As stated in the introduction, the temporary organization can be regarded as an actor network that is mobilized in order to solve a certain , task. However, according to 1,undin and Soderholm ( r 9 9 5 : 4 4 ~ )temporary organizations can be characterized according t o whether they address a unique or repetitive task. Processes in the organization will come to have different characteristics with regard to the task that should be solved. When a repetitive task is solved, the goals are immediate and specified, experiences are in the organization and codified by professions, and competencies are in codes or are tacit. When a unique task is t o be solved, goals are visionary and abstract, there are no experiences t o rely on, or it is outside the organization, and competencies are diverse or unknown, which requires flexibility and creativity in the organization. Thus, the actor network mobilized, will have different
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characteristics concerning the task that would he solved. So, how can the process of mobilizing the actor network be considered? By using the language of ANT, the process can be viewed as a process of translation where the interest of the different actors is translated into an interest that is common for all of them. Translation can be understood as follows (Callon & Latour, 1981279): " ... all the negotiations, intrigues, calculations, acts of persuasion and violence, thanks to which an actor or force takes, or causes to be conferred on itself, authority t o speak or act o n the behalf of another actor or force. 'Our interests are the same', 'do what I want', 'you cannot succeed without going through me'. Whenever an actor speaks of 'us', slhe is translating other actors into a single will, of which sthe becomes spirit and spokesman. Slhe begins t o act for several, no longer for one alone. Slhe becomes stronger. Sthe grows."
From the perspective of translation it can be assumed that the process is more or less formalized in temporary organizations where the task is repetitive. The formalization of the process implies that action is restricted concerning actors' predefined roles and relations, and needed skills and competencies are known. However, in cases where the task is unique and goals are visionary, or not well specified, a formalization of the whole process would be more difficult to achieve, since actors' space for action and interpretation of goals is greater (Linde & Linderoth, 2000). This can be realized if different renewal projects or IT-projects aiming at changing organizational structures are taken into consideration although the information in the early stages about outcomes in these projects 1s limited (Christensen & Kreiner, 1991; Ciborra, 1996). Regardless of whether the temporary organization solves a repetitive or unique task, the question remains: what will happen if the actor network is mobilized? The mobilization or the formation of the temporary organization can be described by Latour's alternative perspective on diffusion of innovations (Latour, 1986:267): "the spread in time and space of anything - claims, orders, artifacts, goods - is in the hands of people; each of these people may act in many different ways, letting the token drop, or modifying it, or deflecting it, or betraying it, or adding t o it, or appropriating it".
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During this process, it can be assumed that actors in the temporary organization just adopt the idea and appropriate it according to their earlier experiences from similar contexts if the task is repetitive. O n the other hand, if the task is unique actors may modify or transform the ideas into something that was unintended (Hanseth & Braa, 1998), or they can neglect it, or they can build a competing network in order t o avoid intended changes (Dolin, 1999; Linde & Linderoth, 2002). Thus, irrespective of whether the temporary organization should solve a unique or repetitive task, how can the project process be understood from an ANT-perspective, if a deeper knowledge were gained about differences in actors' space for action in the temporary organization? The process of translation can be seen as a travel of ideas through time and space where the ideas on such a journey are materialized into objects or action (Czamiawska & Jorges, 1996). However, it is important t o stress that it makes little sense to speak about translation in general. A medium has t o be defined into which the translation can be inscribed such as public discussions, texts, technical objects, embodied skills, currencies, etc. (Callon, 1qq1:143). Furthermore, it is also obvious that the temporary organization can be a medium where ideas can be inscribed. Inscription refers to desired programs of action or patterns of use that someone inscribes into a medium such as a technical artifact (Akrich, 1992:205): "Designers thus define actors with specific tastes, competencies, motives, aspirations, political prejudices, and the rest, and they assume that morality, technology, science, and economy will evolve in particular ways. A large part of the work of innovators is that of "inscribing" this vision of (or prediction about) the world in the technical content of the new object. The technical realization of the innovator's beliefs about the relationship between an object and its surrounding actors is thus an attempt t o predetermine the settings that users are asked t o imagine." Inscriptions can further be strong or weak with regard t o whether an inscribed program of action has to be followed or not (Latour, ~ q q ~ ) , or flexible or inflexible with respect to what the inscriber has delegated to the actors respective to the artifact. However, the strength or flexibility of an inscription is not given per se. Latour (1991) describes how an inscription can be strengthened and uses as an example o f this cour-
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se of action a managing director of a hotel who wants guests to follow a desired program of action. Hotel guests should bring back room keys instead of following an anti-program, which is keeping room keys in their pockets. First, the director inscribes the wish into a sign at the reception desk, but the inscription is too weak and the actors do not perform the desired act. After a series of translations, the director's wish is finally inscribed illto a metal knob attached to the key. In this way the inscription is made strong enough to encourage the guests to follow the desired program of action (bring back the keys), instead of the anti-program (keeping the keys in their pockets). Another mode of strengthening an inscription is to link or align it to large and complex actor networks in the surrounding context. For example, inscriptions having an impact on actors' roles and relations and how processes would be organized in a temporary organization can be regarded as strong while they are linked to large and complex actor networks such as PMI (Project Management Institute) and IPMA (International Project Management Association). To regard PMI and IPMA as actor networks is rather logical if Callon's (1q87:qj) description of an actor network is taken into consideration: "...the actor-network is reducible neither to an actor nor a network. Like networks it is composed of a series of heterogeneous elements, animate and inanimate, that have been linked to one another for a certain period of time". PMI and IPMA have had a powerful influence on how action would be carried out in a temporary organization by defining how projects are organized and how roles of the actors are defined. These organizations' views on how to organize temporary organizations are further manifested through conferences about project management, literature published on the topic, and certification of project managers. Taken together these manifests of heterogeneous animate and inanimate elements are than an expression for a powerful actor network.
The process of translation According to the ideas of translation, a project can be seen as an idea of something that is translated and inscribed into a temporary organi-
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zation, and depending on whether a repetitive or unique task is managed in the temporary organization, inscriptions will have varying strength and flexibility. The temporary organization can be seen as a result of attention directed at an idea. However, a forum has to be created for the continuing travel and materialization of the idea. This forum can be expressed in terms of an actor network where the idea is translated over time and space. In this process of translation, four moments can be identified (Callon, 1986:zo3ff): problematisation, interessement, enrolment, and mobilization of allies. At the moment of problematisation, or how to become indispensable, an issue is defined as a problem by a group of actors. To solve this problem, it is necessary both to identify which actors are indispensable and their roles and relations in the problem-solving network. However, actors can have different goals with their participation in the network. Thus, it is crucial to find a question whose answer is of common interest for the participating actors despite their different goals. This question is called an obligatory passage point, which means that the actors have to recognize that the answer to the question can benefit each of them (Callon, 1986:zojff). When a problem is defined and participating actors and their tentative roles are identified, the next step in the proccss is to stabilize the describes the second moment, interessenetwork. Callon (~986:zo7f) ment, or how allies are locked into place: "the group of actions in which an entity attempts to impose and stabilize the identity of the other actors it defines through its problematization".
It is important to stress that the actors' formulation of goals and identities do not appear in an independent manner, they are instead adjusted and formed during action. This can also be realized if we consider that an individual organization can be seen as part of a wider system in society (Brunsson & Olsen, 1993). At the moment of interessement, Callon argues, it is important to weaken the actor's links with other entities as these might negatively influence the identity of participating actors (Callon, 1986:108): "To interest other actors is to build devices which can be placed between them and all other entities who want to define their identi-
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ties otherwise. A interests B by cutting or weakening all the links between B and the invisible (or at times quite visible) group of other entities C, D, E etc. who want to link themselves to B." . If the intressement is successful, it will lead to the third moment, enrolment, or how to define and co-ordinate roles. In the first moment of translation, problematisation, the importance was stated to find a question (the obligatory passage point) whose answer would be beneficial for the participating actors despite their goals. At the enrolment stage, this question has to be transformed into a series of statements that are more certain. Callon (1986:211) describes enrolment as the "multilateral negotiations, trials of strength and tricks that accompany the interessement and enable them to succeed" and a set of interrelated roles are defined and attributed to the actors who accept them. However, a crucial problem in network building is how to enroll and control others. Latour (1987:108ff) suggests some strategies to enroll others: let them follow your interests on the way to their goals; suggest a short detour when their pathways are cut off; reshuffle goals and interests by inventing new goals or groups or becoming indispensable to others. If the tactics to enroll others succeed, a black box will slowly be built and actors are kept in line (McMaster et al., 1997). A black box can be described as a situation where many elements are brought together and act as one (Latour, 1987:131), or where things put in the black box no longer have to be testified (Callon & Latour, 1981). In the fourth stage, mobilization of allies, the question is raised whether the spokespersons for the actors are representative. Are they authorized to speak legitimately for the rest of the actors? A critical point here is to "silence" actors in whose name the spokespersons speak. If there is a lack of authorization or if other actors are not silenced, the network can be contested at any time. However, if the process of translation has succeeded, a constraining network of relationships has been built, and the room to maneuver has been limited for the entities concerned (Callon, 1986:214ff). This network of constraining relationships is also an expression of the black box. However, at first glance it seems to be a problem if the process of translation were compared with the theory of the temporary organization. In the temporary organization, termination is of an axiomatic nature, and the actor network represents a state that would be stable for at least awhile. Nevertheless, this contradiction might be possible to solve, which will be discussed in the following paragraphs.
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Using this brief description of some basic concepts in ANT and in the translation process, the temporary organization can be seen as an actor network, and the project process can be viewed as a translation process. However, is it possible that ANT can contribute to the knowledge about temporary organization more than in an elementary manner? It can be claimed that ANT has the biggest potential to contribute to the knowledge about temporary organizations concerning those that manage unique tasks such as different renewal efforts where the goals are visionary and abstract. By analyzing these cases from an ANT perspective it will be possible to uncover in depth how different groups of actors might translate project goals into their interests in order to strengthen their power in different senses. A further strength of ANT, which will not be elaborated on here, is that the theory is suitable for analyzing IT-projects by using the concept of inscription (Dolin, 1999; Hanseth & Monteiro, 1997; Holmstrom & Stadler, 2001; Linde & Linderoth, 2002).
The theory of the temporary organization meets actor network theory If the theory of the temporary organization (TO) is compared with the process of translation, striking parallels can be seen according to phases and the content in the phases; however, even if the models are not blueprints. Over all, the T O can be seen as an actor network that has a limited life span. At first glance, the theory of the T O and ANT might appear incompatible because one end of the T O is termination and one end of the actor network is a stable state, at least for some period. However, this problem can be solved using the concept of black box from ANT. In the first phase, action-based entrcpreneurialism/problematisation, the temporary organization, or the mobilized actor networks are regarded as solutions to some problem. In temporary organizations that manage repetitive tasks this form of organizing and roles of participating actors can be seen as institutionalized (an existing black box) and role definitions and programs of action inscribed in project plans are linked to powerful networks such as PMI and IPMA. Challenging these networks and encouraging other modes of organizing projects and new roles in projects implies that networks more powerful than PMI and
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IPMA need to be developed. In the T O that solves a unique task, actors cannot rely on black box or institutionalized modes of organizing. Instead, the organization must first gain legitimacy. Lundin and Siiderholm (1995:446) claim that many renewal projects are launched because of efficiency and effectiveness problems that need to be developed and managed under time constraints. From an ANT-perspective, these renewal projects can be regarded as obligatory passage points. Actors who are arguing for the need for the temporary organization translate it to the only means for the organization to be e.g. more effective, improve product quality or customer services. In the second and third phase, fragmentation for commitment building and planned isolation, respectively intressement and enrolment, the T O or the actor network is developed by co-ordinating and defining the roles of the actors. TOs that manage repetitive tasks carried out by actors are probabl y not questioned because of the black-boxed role definitions. This can be realized if a construction project, for example, is taken into consideration. In this project, the roles and relations of professional categories are institutionalized, and relations with subcontractors and buyers are regulated through written agreements. If there are disagreements about outcomes of the project, there are regulations about how to solve such problems. However, in a T O where the task is unique, actors cannot rely on earlier experiences that are more or less black boxed. Roles are instead negotiated during the project process and the outcome of the process depends on the degree proofs can be delivered in accordance with claims made at the obligatory passage point. For example, if the goal of the T O is to improve quality of products, proofs are to be delivered how actions taken in the T O can improve the quality of products, if the efforts of the T O were successful in some sense. A further problem to be aware of when a task is unique is that goals are abstract and visionary, which implies that groups of actors in the T O and in the surrounding context can make their own translations of the goals. These translations do not have to be in accordance with management's intent. In the worse case, from the view of the TO, competing translations can be promoted by powerful actors who are building their own competing networks that can threaten the existence of the T O (Linde & Linderoth, 2002; Dolin, 1999).
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Black boxes us bridges between temporality and permanency At the first glance, the most problematic issue when the theory of the temporary organization and the process of translation are compared is the last steps, termination and mobilization of the allies. The mobilization can be seen to occur when the actors in the network are performing desirable acts, and possibilities to perform other acts are limited. The obvious problem in the comparison is that the actor network has an indefinite duration even if it can be re-defined, but the TO has a definite termination point. However, the concept of transition, which is closely connected with the termination of the TO, may indicate how the tension between the last steps in both models can be solved. Lundin and Soderholm claim that something has to be transformed or changed before the termination of the TO. Thus, transition implies that something has to be delivered such as a developed product, a building, or changed work routines. By using ANT terminology, the transition is about the delivery of a black box or something that no longer has to be taken into consideration. The black box that is delivered can then be seen as a representation of a mobilized actor network. For example does the actor network not have to be mobilized continually when a developed product is used. Instead, the actor network is literally inscribed into the black box represented by material artifacts, written texts, or changed work routines. However, the black boxes can leak depending on the medium into which the actor network is inscribed. This means that the persistence of the "result" transferred from the TO depends on what is transferred. Moreover, the persistence of the "result" transferred from the TO depends on assumptions made in the TO about the context into which the "result" would be transferred. By using the concept of black box in order to illustrate what happens in the process of transition, it might be possible to enrich the theory of the TO and bridge the gap between temporality and permanency. However, by using the concept of black box, more than just theories about temporary organizing can be enriched. This concept can also shed some light on empirical problems of transfer efforts from a TO to a permanent setting. The following two examples - new car model development and the implementation of a video conferencing system in a health care setting - illustrate how the concept of black box can be used in order to build
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a bridge between the termination of the TO and the post-project stage. In the first example, new car model development, designers have tried to close the black box rather carefully by delegating certain tasks to the users, the technological artifacts, and skilled repair-people. This delegation is done when actors in the TO inscribe their assumptions about the context for use and the potential user into material artifacts and written text. Tasks delegated to the user are driving the car in an appropriate way, filling up with petrol, and maybe some simple maintenance. However, the designer cannot wholly govern the acts of the car user. There are no guarantees that speed limits are followed or that the car is driven according to manufacturer's recommendations. However, designers can direct the user how to chose the right type of petrol by designing the diameter of the petrol tank hole to only fit the correct petrol pump. A prerequisite for this inscription to be strong enough and influence the actors to act in a desirable manner is that the inscription is aligned with the surrounding network: the petrol stations and the petrol pumps. Thus, in this case it is not only to close the black box by designing a certain diameter of the petrol tank hole if the user acts in a desirable mode. Instead, it is the strength of the inscriptions that directs the actor to act as intended and not to consider alternative actions, is dependent on whether thc inscription is aligned with the surrounding actor networks. In the case of the video conferencing system in a health care setting, technology designers have delegated a relatively large degree of tasks to the TO and the potential users, while the technology is a so-called general purpose technology. T h s implies that the technology can be used for the transfer of live or frozen pictures in real time, and the question of when and how the technology would be used is delegated to the TO and the future users. The task for the TO will then be to develop appropriate fields of applications and try to discover how and if organizational work routines are to be changed if technology use is to be integrated into daily work routines. However, while the technology is open to its character it will not be possible for actors in the TO to foresee all fields of application and organizational consequences of technology usage. First, there can be a slight or significant shift in role and function in concrete situations of technology usage compared to the planned, pre-defined, and assigned objectives and requirements irrespective of who plans or defines them (Ciborra, 1996). Second, it will also be difficult for technology designers and managers to predict how
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a complex technology will be used. The openness implies that organizational members will learn more about the technology's features and its fields of application over time (Rosenberg, 1982).Thus, the problems connected with the transition of efforts from the T O will be both to seal the black box and keep it open, which means that the potential users should use the technology, but they also have to further develop appropriate fields of application. In cases where appropriate fields of application are identified and organizational routines are adapted, the black boxes are sealed if new tasks are routinised. However, at the same time the black box does not have to be sealed if there are to be further developments of technology usage. Nevertheless, the black box can be sealed even if there are no strong inscriptions that impose the actors to use the technology. But, what then happens is that no one takes into consideration whether the technology is used or not while the black box is sealed, and non use has become the only alternative. Although the last example mirrors a special kind of TO, it highlights problems that are common in all TOs where organizational change processes are managed: we might not know how far the process has reached when the TO is terminated. The next section describes how the change processes can be considered.
"Perpetual" creation of black boxes The discussion regarding temporary organizations shows that in some kinds of projects the project process has to be continued even after the formal termination of the temporary organization. However, for what kinds of projects is this statement valid? Probably there has to be a unique task, and the project would aim at making changes in the organization. These projects can be characterized as "fuzzy projects" (Linde & Linderoth, 2000).This means that project-goals cannot be specified on a detailed level in the planning stage of the project. Instead, goals and sub-goals are developed in interaction between actors in the project as well as in the project context during the project implementation. Fuzzy projects aim at changes in work procedures and structures in organizations, which implies that a large number of people are affected and on whose co-operation the projects depend. A further characteristic of these projects is the vague project organization with few people engaged full-time or even part-time during the project life cycle. Never-
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theless, how can the project process for "fuzzy projects" be regarded if the concept of black boxes is used in order to illustrate the transition of efforts made in the T O into a more permanent setting? Linderoth (2000) has implicitly argued that a project process where open, or general-purpose technologies are introduced into an organization in order t o trigger change, cannot be discussed in general because it is not known how technology use will develop. Instead, there is a need to view the process as a development of different fields of application. This perspective originates from Gutek et al. (1984:234) who claim that advanced IT consists of "a set of loosely bounded capabilities that can be implemented in different ways". However, the difference between Linderoth's and Gutek et al.'s perspective is that a discussion about fields of application is more precise since it is known what would be implemented, which is a result of the learning process during the interaction between the technology and the user. Nevertheless, the account for an ongoing learning process is not clear-cut. A study of advanced manufacturing technology shows that there are windows of opportunities for learning and technology adaptation (Tyre 81 Orlikowski, 1994). However, it is also claimed that usage of new IT-applications triggers changes in small invisible steps and after a while can lead to a total transformation of work routines (Orliokowski, ~ 9 9 6 ) . Thus, how can this discussion about the development of fields of application be connected t o the discussion about black boxes as a means for transition of TO'S efforts? As stated earlier, a black box does not have to be sealed if a development of technology usage proceeds. But against the background of the development of field of application it may be more appropriate t o discuss this in terms of several black boxes instead of one black box. The routinised use of a field of application can be considered as the sealing of one small black box, which implies that if a renewal effort is to be successful a number of black boxes are t o be transferred and merged together and develop into a larger one. The proposed project process of fuzzy projects gives new insights into the process compared to models that consider the process as more or less a straightforward process. Models proposing a straightforward project process might be correct for less open technologies or when tasks are clearly defined. However, in cases of open technologies, or unique tasks, a process of learning has t o occur if fields of application are to be developed and used.
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Concluding remarks The discussion in this chapter about actor network theory and the theory of the temporary organization has showed that ANT can be used to enhance the understanding of temporary organizations. The main contribution of ANT to the theory of the temporary organization has been to broaden the view of the transition concept by using the concept of black boxes and fuzzy projects. Nevertheless, in this chapter a first attempt has been made to combine ANT and the theory of the temporary organization. Nevertheless, there is much room for studies to combine ANT and the theory of the temporary organization. Furthermore, it has only been discussed how ANT can contribute to the theory of the temporary organization, but future research should examine how the theory of the temporary organization can contribute to ANT. Further studies in this area could be the ever-present issue of how to preserve learning and knowledge after the termination of a project. This topic could contribute to both the understanding of the temporary organization and to ANT with respect to the field of organizational learning.
The attractiveness of projects: Controllability and adventure The attractiveness of projects, claims Sahlin (1996), lies in their association with both controllability and unpredictability. They are associated with something planned, rational and ordered, and at the same time with flexibility, change and adventure. This double identity make projects attractive, but it may also present a dilemma t o project-managers. This dilemma is more or less present in all organizing processes, where one has t o strike a balance between freedom and control, but it takes on a particular character when it comes to projects, because of their delimited and temporal character. Of course, some projects are more controllable while others are closer t o adventure, but it is common for projects to give rise t o expectations of both. Both aspects - controllability and unpredictability - follow from the possibility of delimiting a project. One way of controlling a complex situation is t o divide it into smaller pieces, or projects, each of which appears controllable. By organizing an operation as a series of projects centered on individual tasks of limited time spans and involving specific people with specifically allocated resources, control appears achievable. So, creating a project through delimiting a specific time, task,
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and team (cf. Lundin and Soderholm, 1995) may be motivated by a wish to enhance controllability. Projects may also be motivated by a desirc to break with earlier habits in order to experiment, to allow for flexibility, or to promote innovation and change (cf. Christensen and Kreiner, 199 I ) . As the delimitation of a project goes to the very heart of what a project is, the setting of these delimitations is a strategic aspect of project management. An oft expressed ideal is that projects should be clearly demarcated and defined. First, projects need to be delimited temporally: they are supposed to have a specified starting date and a deadline or concluding date. The very idea of projects is that they - unlike many organizations - should avoid the development of an interest in the survival of the setting as such among the stakeholders. Moreover, setting time limits helps focus attention and commitment (Lundin and Soderholm, 199s). Second, a project is ideally formed around a specific task with a specified objective. Such delimitation of the project's task is often combined with organizational and financial specifications. Certain people are engaged for a project. In terms of accounting, a project usually comprises a profit or result center, so that costs and revenues from the project are specified. And third, projects are often institutionally demarcated. The idea behind many projects is to set aside certain rules, routines, and norms as to how work is to he pursued, and instead apply customized rules, policies and norms, in order to increase controllability, adaptability, flexibility, and innovation as the project unfolds. But, of course, as is true of all organizing processes, a project is open both to influences from its context and to influencing its context. Both the project management literature and many critical studies of projects point out the problems connected with ineffective, nonexistent, or too flexible boundaries. Stories abound of how projects do not wind up, but instead are delayed or even drift into becoming more or less permanent activities. Another problem, often commented upon, is the risk of losing project specificity. Projects can be unduly influenced by and gradually meld into the everyday operations of an organization, with a resulting loss of focus on the task at hand. Overly porous institutional boundaries mean that the project comes to bear the stamp of prior habits and routines, which may result in a loss of innovative capacity and flexibility. On the other hand, it is not difficult to find examples of how pro-
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jects tend to become too isolated from their contexts, which may result in unrealistic, inappropriate, or even disastrous results (Hall, 1980; Sahlin-Andersson, 1986). Rigid boundaries may result in a project that is so isolated from its context that project members develop unrealistic expectations and plans that they then fail to realize (note the parallel to "group think" as analyzed by Janis, 1972). Hermetically sealed boundaries can also prevent learning from being transferred from one project to another. This may cause problems, especially in project-based companies where there is a concern that experience gained in one project should be applied in others in the future. Projects should thus not be too isolated or delimited from each other. Project entrepreneurs and project managers' have to strike a balance between delimiting and connecting the task, the time and the institutions of the project. How then are such boundaries to be established and of what do they consist? Just as with organizational boundaries (Scott 1998, chapter 8; Brunsson and Sahlin-Andersson, zooo), project boundaries d o not appear automaticall y as the project is formed, and are not set in stone once and for all. Instead, they are socially formed, and boundaries have to be continuously defined, sustained, or changed. This is why I suggest that boundary setting, revision, and maintenance are such important aspects that they deserve to be defined and analyzed as distinct aspects of project management. In this chapter I will present a framework for analyzing such project boundary work, and my discussion will point to the considerations and dilemmas that project entrepreneurs face as they pursue such boundary work. I have borrowed the tern1 "boundary work" from Gieryn (1999). He analyzed "how boundaries of science are episodically established, sustained, enlarged, policed, breached, and sometimes erased in defense, pursuit, or denial of epistemic authority" (p. xi). The boundary work of science is primarily concerned with legitimacy and jurisdiction, as it aims at distinguishing what is scientific from that which is not. Seen in this light, the boundary work of science may seem to have little to do with that of project management. But just as the boundary work of science is a discursive endeavor which aims to draw a rhetorical boundary distinguishing outsiders from insiders, and where the actiWhen writing abour project entrepreneurs rather than only project managers, I would like to emphasize that project boundar y work is not only, or even mainly pursued by appointed projcct managers. As the examples below show, such boundary work is a more dispersed task encompassing a broad group of proponents, stakeholders and managers ot projects.
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vities, resources, norms, and regulations applying inside the boundary are distinguished from those outside, so is the boundary work of project management rhetorically drawn. Even though the boundary work that Gieryn analyzes comes from a very different field and was done partly for different purposes, his work suggests a way to specify both what boundaries are and how they are set. This motivates a brief account below of boundary work as the concept has been defined and used by Gieryn. The rest of the chapter is structured as follows. First, the concept of boundary work is elaborated on and applied to projects. Second, three types of boundaries - temporal, task, and institutional - are defined and exemplified. Examples typifying boundary work are taken from a series of case studies of large projects. These cases concern three major projects that have been pursued by Swedish cities and counties: a sports arena (Sahlin-Andersson, 1989); a research park (Sahlin-Andersson and Soderholm, 1987; Sahlin-Andersson, 1990);and a theater (Lundin, 1980; Sahlin-Andersson, 1986). Using these examples, I will illustrate how project entrepreneurs pursue boundary work, what dilemmas they face as they seek to strike a balance between demarcation from and connection with the context, and how this boundary work is related to project entrepreneurs' seeking to attain controllability and/or "adventure." The projects were all defined and perceived as major, even extraordinary projects, and the studies of them partly focused on the meaning of the definition of the projects as "extraordinary." I will expand upon this central aspect of boundary work: the identification of the project as it is defined and presented throughout the process.
Boundary work Gieryn (1999) defined boundary work as "the discursive attribution of selected qualities to scientists, scientific methods, and scientific claims for the purpose of drawing theoretical boundaries between science and some less authoritative residual non-science" (p. 5 ) . A cultural space in which scientists can act and interact is delineated by the way in which science is presented and represented. Boundaries define insiders and outsiders, and separate scientific activities from other activities. These boundaries are constantly being drawn and redrawn. And the boundaries differ depending on who draws the boundaries, and against whom and what. Hence, boundary work is an ongoing interpretive activity.
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Project boundary work partly resembles scientific boundary work. The boundaries around a project define certain activities, outcomes, people, and costs as part of the project while others are excluded. Boundaries define whose work and input is relevant for the project, who is responsible, and what rules, norms, and habits apply. So project boundary work is an ongoing interpretive and rhetorical activity. This way of describing project boundaries differs from how the delimitation of projects is usually described in the project management literature. In much of this literature the identity of the project - what task it is to handle, its temporal limitations, what rules and norms apply - is usually treated as a given. In the same way are definitions of projects as major or minor, ordinary or extraordinary, as unique or representative of a series of projects often treated as given. However, several studies have shown that there are no "given" or inherent properties of any task or issue; instead they are classified as big or small, important or trivial, ordinary or extraordinary (e.g. Edelman, 1988; Hilgartner and Bosk, 1988; Sahlin-Andersson, 1986, 1989).
Temporal, task, and institutional boundary work Three kinds of project boundaries were mentioned above: temporal, task, and institutional boundaries. I argue that these delimitations indicate what the project is and how it relates to its context. What, then, constitutes such boundaries and how are they set?
Temporal boundary work Temporal forms of control are vital in all kinds of organizational settings. Rhythms, sequences, time horizons, timing and temporal perspectives can largely explain many aspects, including relations among various groups in organizations, the allocation of attention, and modes of organization (Whipp et al., 2002). The setting of deadlines serves to focus attention and mobilize action (Cohen et al., 1972). Although plans may not always drive certain activities, they often serve as reference points when evaluating and accounting for particular activities and their outcomes. Such temporal forms of control are also salient in
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projects, but are even more important: the very definition of a project, in general as well as in particular contexts, is a temporal one. Projects have been analyzed as temporary organizations (L,undin and Soderholm, rqqs), and the starting and ending time is what demarks a project. Many projects are initiated in response to or in anticipation of major events -just think of the many projects that were started in connection to the millennium change. Major buildings are planned to celebrate anniversaries of cities or companies, or to support Olympic games, world championships, or other major public events. Such events motivate projects and supply both a starting date and a deadline for the project. They also tend to define the very meaning of or definition of the project. Hence, when a project is motivated by or connected to an event, the project is placed in a certain context and is delimited in certain ways relative to this context. A recent, well-known public Swedish project is the construction of what has become known as the "Stockholm Globe Arena". This project provides an interesting example of temporal boundary work. This arena was opened for the world ice hockey championship in 1989, and has since been used for sports, entertainment, and other public events. The arena takes the form of a spherical building with a roof height of 8 5 meters and a diameter of I 10meters. The building of this arena was the result of a long process, including a project competition arranged by the city of Stockholm. The project did not comprise just an arena, but a whole block including a hotel, offices, and a shopping center. The planning of this arena had, as is true of many major projects, a long history. For many years the politicians saw it as a drawback that Stockholm did not have an arena big enough to house the world hockey championship, large concerts, or other major events. Municipal government, however, found it impossible to build a new arena at public expense. Two circumstances made it possible to start planning the arena. In the early 1980s another public project was made possible because a new financial model for financing the project was designed: private companies were given the opportunity to build commercial buildings on publicly-owned land in return for reconstructing the public railway station. It was thought that a similar financial solution could facilitate the construction of the sports arena, and project planning began. Moreover, there was a good chance that Stockholm would be given the opportunity to host the world ice hockey championship once they had an arena big enough - possibly in 1987.
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A project group of public officials was appointed, and in July 1984 the municipal government invited some 30 major Stockholm area companies to enter a project competition concerning the design and financing of a sports arena and commercial buildings. Companies that wanted to take part in the competition had to form groups combining financing, real estate, construction, architectural, and other necessary competencies. Interest seemed quite limited though, partly due to the many uncertainties connected with the project. Not only was the financial model largely untested and the economic calculations uncertain; in addition, municipal politicians had yet to specify the budget for the project. Budgetary discussions also delayed the project somewhat, and it became clear that ~ 9 8 was 7 now an unrealistic deadline. However, the linkage of the project t o the world hockey championship was kept in place, since it was still possible to aim for the 1989 games. The temporal boundary of the project was redrawn, but remained fixed in its new position and continued to have important implications for how the project was identified and how it proceeded. This deadline focused attention, and exerted a certain time pressure on the project. The somewhat ambiguous nature of the plans, directives, and proposed alternatives were accepted because of the time pressure. The argument was widely accepted that time was too short to clarify everything that many people would have liked to clear up. I have often encountered that leading actors in projects and other decisionmaking processes refer to time pressure as a way of reducing interaction with other stakeholders (Sahlin-Andersson 1986, 1990). They claim that if the project is to meet the deadline there is no time for excessive debate and questioning, or to inform all stakeholders. Such references to time pressure were also found in the Globe project. Thus, the connection of the project to a specific event helped drive it to its completion. And the fact that the project group members and the project entrepreneurs could refer to a deadline over which they appeared to have no control, made the deadline an even stronger driving force. Towards the end of the decision-making process, the time pressure became even more pressing. If Stockholm was to be picked as the hosting city for the world ice hockey championship, the design of the arena in which the games were to be played had to be presented to the international hockey association by a certain date. This meant that the city could waste no time choosing from among the alternatives presented in competition. So finalizing the choice had to be rapid, and the city had
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little time to negotiate or ask for clarifications or revisions from the competing consortia. The city had to relinquish some control of project content in order to meet the deadline arising from the project's tooclose connection with a specific event. The connection of the project to the world ice hockey championship not only provided a deadline for the project, but also placed it in a particular context and defined its main task. Although Stockholm's lack of a large arena for sports, pop concerts, and other public events in general had long been regarded as a problem, with the particular timing of the project, the task of building the arena for the world hockey championship was emphasized. This meant that primarily people interested in hockey were being mobilized, while other aspects of the project were not as publicly debated. This case exemplifies how the temporal demarcation of a project is intertwined with how the task of the project is demarcated.
Task boundary work A project is usually formed to handle a particular task, such as the construction of a building, the development of a product, the selling and installation of a machine, or the restructuring of an organization. The limitation of such a task demands continuous boundary work. We can illustrate this with examples drawn from a major project, the building of a theatre in UmeH. This theatre was built in the mid-1980s as a combined theatre, convention hall, opera house, and community center. This project had a long history, which entailed complex and active task boundary work. After the old theatre building in UmeH was destroyed by fire in 1913, planning for a replacement immediately started. At the time, the task of the project was defined in relation to the building to be replaced. However, due to the war, the rebuilding of the theatre was postponed. By the time the project was later resurrected, conditions had changed. The estimated cost of the building had increased and new expectations had been placed on it. Discussion on how to replace the old theatre continued in the ~ y ~ o but s , now the task of building a theatre was combined with the task of building a culture center. A committee worked o n this project and considered various alternative locations, but plans were not realized. Many other urgent projects called for attention
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and resources, and it seemed difficult t o garner sufficient support for such a costly project as a combined theatre and culture center. Instead plans were resented for building something temporary and less costly. The temporal and task boundaries of the project, in other words, were redrawn in order to gather support for its realization. However, this building project was not realized either, as it did not fit with other city plans. Umed was a growing city and needed a new city hall. These needs for a new theatre, culture center, and city hall - were combined and a new project committee a pp ointed in r q 5 q had the task of reconciling these needs. The boundary work involved in combining various tasks and thus broadening the project was thought of as a way t o expand support for the project. Such a strategy, however, led t o a dramatic increase in the estimated costs and also meant compromises had to be made in order t o combine the various functions. The project seemed to have been overloaded by the combination of tasks, and it was again postponed as it was considered t o be too costly. The boundary work of oscillating between shrinking and broadening the task of the project continued, but without success. Provisional arrangements were proposed but then turned down. New broad and combined suggestions were proposed and turned down as well. Even though the many suggestions never came t o realization they kept the project alive, so that it could easily be regenerated. One explanation for the continued failure t o complete the project was task overload. Another was that broadening the project task was combined with an emphasis on project boundaries. The group that was assigned t o the project was quite committed to the idea of accomplishing something extraordinary. The project was defined and viewed as extraordinary, and it was clear that project group members and the many architects and planners engaged over the years spared no efforts to live up to the high expectations. For many this was the largest project they had been involved in, and they wanted it t o be something special and unique. Thus, each time the project was resurrected it soon grew and became much more expensive. When plans were then submitted t o the city council, to be voted on by people who were not that involved or committed, they were rejected because of high costs. In the mid-1970s a new combined project was suggested, this time involving a theatre, a home for a recently established opera company, and a community center. Again plans were submitted to city council for
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approval, and once again it turned out that the project had been overloaded with tasks and expectations and had become too expensive. This brief account illustrates a case where boundaries were partly quite firmly drawn, with a clear demarcation between thc project and its context. The appointed project group drew boundaries around the task by referring to its long history, the implication being that such a long history virtually demanded something "extra." The idea became ingrained with repetition that UmeH would have no use for a smaller theater: either a big and unique one or nothing at all. In part these same boundaries did not detach the project from its context, as additional tasks were repeatedly incorporated into the project. At the same time it was clear that temporal boundaries were being redrawn, as the project was presented anew each time it was restarted after rejection by the municipal council. Temporal boundaries relative to the history of the project were partly drawn. However, there were no temporal boundaries for the completion of the project; it was not connected to any specific event and did not have to meet a fixed deadline. What finally led to the building of a new theatre in Umed was the revised boundary work of the project entrepreneurs. Instead of either over-loading the project or proposing temporary solutions, the project was divided in two. Temporary production premises for the opera company were built separately, and in this way the theatrelcommunity center project was scaled down2. The location of the new theatre had been established in the 1970s. Now, since opera production facilities were eliminated from the planned building (the opera would still use the new theater for performances), there would be space for a library - another long planned-for establishment. However, the library was organized and treated as a separate project, and had already been approved by the time revised plans for the scaled-down theatrelcommunity center project were finally being approved by the city council in the early 19sos. As the task of the theatre project was redefined, the contextual relations of the project changed. It can work the other way too: task boundaries may be formed as the context of the project is defined and redefined. Observations from a study of the establishment of a regional
This, however, also meant rhat the project was not completely removed from the local government agenda. In the year zooo the building began on new premises for the opera. The new premises invcluded an opera theater and a concert hall.
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development project in southern Stockholm illustrate this (SahlinAndersson and Soderholm, 1987; Sahlin-Andersson, 1990). For many years the industrial sector in the southern Stockholm region had been shrinking, causing economic strain. As the planning office in Stockholm county investigated the problem to find possible ways of stimulating development, they came to describe it in terms of "an unbalanced region." Such labeling implied that what was defined as a problem for the southern part of the county was the way in which it differed from the wealthier northern part. Once the problem was perceived in such terms, it followed that the designated solution was to do away with the differences between the north and the south: to make the southern part of the county as much like the northern part as possible. Among the more obvious differences between the north and the south were that an airport, a university, and most modern high-tech companies were in the north. Thus, when c o n t e ~ t u a l i z i nthe ~ project in terms of an unbalanced region, the task of the project followed. As the project unfolded, the first elements undertaken were those that fell within or were closely associated with county jurisdiction. A research park was established, and a railway station was built in connection with it so it would be easily accessible.' Other parts of the proposed plans - the establishing of a new university and a new airport were mainly under state jurisdiction or municipal jurisdiction. These tasks were not realized in the first round, but in the mid-1990s a new university was established in connection with the research park. Even though the university was established much later, and it was established by the state, the way in which it was created partly followed on the initial definition of how to deal with the problems faced by southern Stockholm county. The university project was connected with the regional development idea that had been pursued by the county a decade earlier and it was also supported by the county. Thus the task of the university project was at least potentially set by the context in which the project had been pursued previously. The hopes for the region, that were evoked as the project was formed by the county in the 1980's survived even after the project was for-
'
The research park was built on county-owncd land, and research centers were cstahlished that were closely connected with the hospital and the dental care unlts run under county authority. Thc county had no authority over the national railway system, hut the county was the responsible authority for regional trains.
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mally closed as parts of it were completed. Discussion of an "unbalanced region" did not stop with the construction of the research park and the railway station and with the ending of the county-led project. The county-led project had been advocated in terms of regional development, that it would support the development of new economic activity in the southern part of the region. When the development did not meet the expectations of the project proponents (to do away with regional unbalances), the proponents could simply refer to the fact that the whole package of projects proposed in the plan had not been completed. In this way, the partial realization of the earlier plan, and its lack of success in terms of accomplishing regional growth, turned into an argument for further investment in the area. This is an example of how a portfolio of projects is formulated together so that individual projects can support each other. The task and temporal boundaries around individual projects were not fixed independently, but were integrated into each other, organizationally, financially, and rhetorically.
Institutional boundary work The often intertwined temporal and task boundaries of projects comprise the very basis of what a project is. The boundary work concerning these aspects is, as shown above, a means of controlling the project; but it is also a means of attracting attention and securing support for a project. I will now elaborate upon a third, and less often discussed, feature of projects: they may be more or less institutionally demarcated. I propose that institutional demarcations are as important aspects of projects as demarcations of time and task. All organizational processes are institutionally embedded (Powell and DiMaggio, 1991; Scott, 1995; Czarniawska and Sevbn, 1996) and institutions evolve during the unfolding of all organizational processes (Selznick, 1949, 1957). Scott (1995) defined institutions as "cognitive, normative, and regulative structures and activities that provide stability and meaning to social behavior" (p. 33). They are "multifaceted systems incorporating symbolic systems that shape social behavior. Institutions structure the way in which activities are formed, understood and related. These institutions are partly encoded in and carried by written rules, regulations and policies. They are also carried by authority systems and expectations and by categories, typifications and
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identities" (Scott, 1995: 52). This definition implies that institutional maintenance or institutional change only partly result from open negotiations and settled policies; institutional change also depends on changes in matters such as identity and typifications. Hence, as a project is identified and classified in a particular way, the institutional framing of the project logically follows; another, different identification of the project could put it into another institutional context. Formulating tasks as projects may be motivated by a wish to break with certain institutions, or by a wish to segregate particular activities and make them less dependent on ingrained rules, regulations, norms, and habits. Breaking with institutions may be desired when these are thought to hamper the realization of the task at hand. Or it may be motivated by a wish for more long-term institutional change. This is the case, for example, when projects for organizational or regional change are initiated. New or transformed institutions may at the same time develop within the project. The forming of a project may not always be primarily motivated by the wish to accomplish a certain task, but this task can in fact be a means for seeking to attain institutional change. Mendelssohn (1974) suggested such an explanation as to why the Egyptian pyramids were built. According to Mendelssohn "The object of the exercise was not the use to which the final product was to be put but its manufacture. Pharaohs could be buried and where, in fact, buried much more cheaply. What mattered was not the pyramid, but it was building the pyramid" (Mendelssohn 1974:196). How then did this building of the pyramid, according to Mendelssohn, matter? He proposed that the building demanded a large, and relatively permanent, workforce. By forming the large pyramid projects the pharaohs formed a relatively permanent workforce, and at the same time a relatively permanent group of inhabitants of the region, over which they could have control. The main object of the whole exercise was, according to Mendelssohn, the attaining of control and stability, not the building as such. Of course this is a highly functionalistic and, many would say, not complete explanation to the forming of these historical monuments. Still, the intriguing analysis reminds us of the relevance of process. Moreover, it reminds us that objectives ascribed t o projects may differ over time and among actors. In fact, many proponents of projects may be more interested in the potential for institutional change than in the announced task of the project.
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This calls for institutional boundary work, and the following section describes how such work can proceed. Again, observations from the Stockholm Globe Arena project serve as my main examples, as the forming and managing of this project incorporated active institutional boundary work. Few recent Swedish projects have attracted as much public attention as the Stockholm Globe Arena project. Above all, it seems that the big, spectacular, and extraordinary in both the form and development of the project captured public imagination. By the time of its completion, the project was claimed to mark a new means of city planning. But when planning started, the project was not generally regarded as being of any vital strategic value. "Most of the politicians and managers in the city just saw it as building one more sports arena," said one of the planners. Thus the planning was assigned to rather low levels in the city administration. The planners working on the project were afraid that the whole matter would be forgotten: they understood the delegation of the planning work to such low levels to mean that the project was not of vital importance. In addition, the economic basis of the project seemed weak. The only way the planners thought the project could attract enough attention, so that it would not just be stowed in a desk drawer, was to make it bigger, both in terms of the extent of the planned business premises and by formulating the project as "world class" and extraordinary. The definition of the project, and the competition directives, displayed a somewhat mixed typification. Some of the directives were specific and detailed: for example, the project location and deadline were fixed, and the floor area of the proposed offices, shopping center, hotel, and recreation areas were specified. In other aspects the directives left considerable leeway for interpretation. While certain specifications were predetermined, the groups competing for the contract were encouraged to interpret the program freely, and come up with new ideas. At the same time as the program purported to be "world class," other specifications clearly signaled a low cost profile. Only a few groups of companies responded to the municipal government's invitation, and several of these found it difficult to get their work started. They found the city council's competition directives, and hence its project definition, to be unrealistic, inconsistent, and vague in places. Compounding this was the fact that the project was to be located in a less attractive part of the city: construction and real estate companies were rather looking for possibilities to build in the northern part
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of the city where the demand for offices was high. One of the groups that started working on the project soon disbanded. During the initial work, however, the project caught the interest of the architects participating in the group that later disbanded. They were less bothered by the ambiguity, since many architects are used to participating in design competitions. In such cases competition is the important thing - an opportunity for architects to learn and market themselves - while the actual construction of the buildings is not always certain. So the architects started working on a design, and having found an idea which was spectacular and clear enough, eventually managed to assemble a new group of companies, including real estate, construction, and other interested parties needed to produce a workable proposal for the competition. Again, the extraordinary aspects of the project were being emphasized. This emphasis served as a way to attract potential collaborators' interest, and it served as a way t o break with institutionalized practices and relations in the field. The new group, that was assembled in this way, worked under tight time constraints, and had little time to work through either the group dynamics or the model to present t o the city. Moreover, the group deviated in important ways from the competition specifications, as their alternative was based on the architects' concept of a spherical arena combined with a much denser commercial area than was proposed by the city (approximately 150,ooo vs. the specified 75,000 square meters). As the group developed their alternative they modified the proposed financial model too. They proposed that, in exchange for building the arena, the commercial consortium should own rather than rent the land for the commercial buildings. (In addition, the city was asked t o pay SEK 80 nlillion of the costs, as had already been allocated in the city budget). This latter deviation from the program was notable, in that it ran counter to a long-standing city policy that municipal land was in principle inalienable. Clearly this alternative - and the presentation of it - emphasized the extraordinary character of the project. As the competition proceeded, four proposals were under consideration; the city was under considerable pressure to make the decision in time to meet the 1989 deadline. Even though another alternative followed the competition directives much more closely, several jury members were attracted by the more spectacular but also more ambiguous proposal with its larger commercial development, different financial model, and spherical arena. The ambiguity of this proposal, and the
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fact that the financial model broke with institutionalized city policies, were excused by referring to the extraordinary character of the project. By defining and understanding the proiect as "extraordinary," those favoring the project emphasized that it was an exception. Hence, even though this particular case went against earlier policies, it did not mean that the policy was being questioned or was up for revision. Second, viewing the project as extraordinary meant it was seen as unique, implying that no comparable objects or references existed. This excused the lack of clear plans. The presentation of the project in quite spectacular, extraordinary and at times unexpected ways also partly buffered it from criticism. Some plans for the project appeared so different, and for this reason were not taken seriously and hence were neither much supported nor criticized. The exceptional and multifaceted character of this project became ingrained as the group of planners emphasized the extraordinary features in order to make the project visible and attractive. At the same time, this definition allowed those joining the project team to develop their own views of it, and to emphasize the extraordinary character still further. By defining the projcct as "extraordinary," the city opened up the project to "adventure" and change, and gave up some of its controlling capacity. There were, however, recurring attempts to tone down the extraordinary character of the project and instead emphasize its ordinary features. Such definitions open up the boundaries between the project and its context, enabling learning and comparisons. One attempt to seek to understand and pursue the Globe project in more ord~naryterms was found when the competition started. Several competition groups compared the Globe project to other major city-planned projects and found it to be much less clear and supported by fewer formal decisions. When they asked the city planners for clarifications, but without getting any clear answers, they read this as a sign that the project lacked broad support, and this led several groups to withdraw from active participation in the project. Another attempt to understand - and revise - the project in more ordinary terms was made by the construction companies in the architects' group that advocated the spherical arena design. The way the architects assembled the group and conducted the project, did, in many ways, break with institutionalized field principles. For example, some less-established construction companies were recruited to the group by
PROIECT MANAGEMENT AS BOUNDARY WORK
the architects - an unwelcome move for the leading, established construction companies already in the group. These usually dominant large companies, as well as some real-estate interests, noticed that the architects - who did not usually lead such projects - had acquired a leading role. Representatives of the construction companies described how they had to "straighten things up" in the group, by emphasizing parallels with earlier projects. As they gained more control over the project, they excluded less-established companies and began to handle the project in what they perceived as the "normal" way. Still, as negotiations started between the city and the competing consortia, the architects' group persisted in referring to the extraordinary character of the project when proposing deviations from the competition directives as well as from city policies more generally. Deviations from the competition program, from municipal policies and from "the traditional way of working with large construction projects" partly followed from the way in which the project was defined, partly the way of working emerged incrementally as a result of unexpected and unplanned events. However, these deviations cannot only be understood relative to the individual task at hand. In addition, deviations were consciously pursued by those who saw a chance to disregard and possibly even change the institutional framing of city planning and of the way in which the construction industry worked. As the project was presented and perceived as extraordinary and as it was run under time pressure, those actors who were interested in changing current matters took the opportunity to pursue their way of working. They used the identification of the project as extraordinary as an excuse for not running the project according to the traditional rules and conventions. In terms of boundaries, this can be described as a way of closing the boundaries around the project so that the work among those most actively involved continued in a way that was buffered from other stakeholders. Later, those interested in changing the system along the lines of the development of the Globe project rather referred to this project as a precedent - an early but ordinary example the could be followed. The Stockholm Globe Arena project was implemented at a time when, seen in retrospect, dramatic shifts were taking place in the control of the public sector and the way in which the private and public sectors were related. The Stockholm Globe Arena project was an early example of public planning and decision-making that was much more intertwined with private interests than had previously been the case. Of
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course, the Globe project did not itself cause these shifts, which were global in scope. But for those at the time who were arguing for greater private involvement in public planning, the Globe project served as a good example. However, a project is a better precedent for future planning if it is not defined as so "extraordinary," so those using such a case as an example will describe it as ordinary and normal rather than as exceptional. Hence, to allow a project to create an opening for or to support future institutional changes, the institutional boundary work must continue. Initially and during the process a project that is defined extraordinary draws new institutional boundaries so that earlier institutionalized patterns do not seem to apply. The definition of a project as "extraordinary" allows for new or changed procedures and relations. In order for the project to influence future patterns, however, it must be redefined as less extraordinary. In similar ways, many change projects are defined and described as "new", thereby signaling the break with earlier modes of operation. This has clearly been the case with recent public service reforms around the world. Such reforms have been presented - b y the reformers as well as by proponents and analysts of such reforms more generally - as "new public management". The definition of New Public Management (NPM) is general rather than specific. What is more, it is sometimes argued for and defined not as a new form of governing, but rather in terms of what it is not - i.e., the old public administration and bureaucracy. This feature is most clearly captured by the word "new", which signals that it is a way of managing that breaks with previous traditions. Even though parts of what is today included in NPM is not particularly new - in relation to previous ways t o administer the public services or in relation t o theories and principles for management that have been taught in business schools and practised in business (Jacobsson and Sahlin-Andersson, 1995; Furusten and Lerdell, 1998) - when circulating these models under the heading of NPM, this label clearly signals a break with the past and the introduction of something new. The emphasis of the "new" attracts attention, and makes the reform project that are persued under this label interesting for those who want to break with previous institutions. As the public sector was being questioned in many western countries in the late So's, projects that so clearly signaled a break with the past and the introduction of something new attracted a lot of interest (c.f. Olson et al., 1998; Christensen et al., 2001).
PROJECT MANAGEMENT A S BOUNDARY WORK
Project definition as boundary work The above examples show how, and partly why, boundaries are drawn by the way in which a project is defined and accounted for. Boundaries are established in project specifications, as certain people and resources are allocated to the project, and as contracts are signed and tasks and responsibilities set forth. And they are drawn by the way accounts are formed as a basis for allocating costs and revenues. Boundaries are further set by the way the project is defined and described in relation to its context, and, as my examples show, such boundary work is actively pursued. I have particularly focused on two aspects of such project boundary work. I have described how temporal, task, and institutional boundaries are drawn through the way in which projects are described and defined. I have emphasized the importance of defining projects in relation to particular events. Moreover, I have pointed to the importance of whether projects are described in terms of new or not new, ordinary or extraordinary. The definition of a project as new and extraordinary can detach it from certain institutional orders. In this way, project boundary work can serve to facilitate more longterm changes, or it can serve as ways of avoiding change and maintaining stability. An identification of the project as new and extraordinary opens it up for adventure, giving less control to those who seek to control the project from within any certain institutional setting, and it signals the break with earlier institutionalized orders as well as a break with those institutional orders that apply in more "ordinary" situations. If a project continues to be identified as extraordinary or exceptional, the project does not provide any motives for more general or future institutional changes. If, however, the project is redefined ex post to be seen less as an exception and more as a new hut ordinary way of proceeding, this opens up for further changes where the project can be treated as an example to follow. This analysis has focused on aspects of proiect management that are not so often discussed in the literature or in practice. Partly this can be explained by the fact that the project boundary work is not in the hands of appointed project managers, but it is dispersed among a much wider group of project facilitators and project entrepreneurs. The examples show us not only how such boundary work proceeds, but suggest why such boundary work tends to be a more or less concealed aspect of project management. Boundary work is a rhetorical activity.
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It is not in the hands of individual managers or decision-makers, but the success of such boundary work is dependent upon many intertwined interpretations. Boundary work seems to be most effective when the boundaries are regarded as given. This was described in relation t o the temporal boundaries mentioned above, and it seems t o be true of other sorts of boundaries as well. Hence, it is not in the interest of the actors pursuing such boundary work t o display and elaborate upon it as an important management activity. This is illustrated in the following quotation from a newspaper interview with one of the leading politicians behind the Globe project (my translation): "The Globe project was 'speedy', time pressured, large, and difficult. This kind of project always turns out to be more expensive than initially expected, said the Stockholm Commissioner, who also meant that 'the great adventure' after all was worth all this." And the interview continues with another comment from the politician to the outcome of the project: "But we had the guillotine over our heads, in that the Globe had t o be completed for the world ice hockey championship in the spring of 1989."
If I were to use the metaphorical rhetoric of this politician, my comment would be that it was he himself and his colleagues who set up that guillotine as part of their boundary work. It is our task as scholars to go beyond the accounts given by managers of how they manage projects, and based on our independent studies, reveal how such work proceeds. Studies that go beyond the self-representations of managers need to be assisted and guided by theoretical frameworks that also go beyond the self-representation of the individual manager. In this chapter, institutional theories and the sociology of science have helped me go beyond project management. I hope this brief essay can inspire future research into project boundary work and the institutional embeddedness of projects, and more generally, into combining in-depth empirical qualitative studies with theoretical lessons from other fields.
The
the
Project failures and unclear goals Delays and cost overruns seem to be something of a natural law in project management. Reports from all over the world unanimously create a very depressing picture. Regardless of industry, technical content, type, or national origin, projects are reported to suffer from significant delays and cost overruns with respect to set plans (Morris & Hough, 1987; Standish Group, 1999). However, in spite of these reports, project management and project organizing have become increasingly popular during recent decades, both in business and public administration. This is a paradox. In spite of its obvious failings, project-based management is believed t o be an effective and dynamic alternative to traditional, and seemingly old-fashioned, bureaucratic structures. How come? A continuously failing management idea is expected to die, not become increasingly popular. Analyses of project management failures usually deduce the cause as one of three main categories. First, projects seem to fail due to deficiencies in their management, i.e. insufficient planning, lack of coordination, improperly chosen technical solutions, etc. (Pinto & Kharbanda, 199 5 ) . Secondly, projects seem t o fail because of environmental factors, i.e. being opposed by important stakeholders, other projects having a higher priority, or not obtaining sufficient resources, etc. (Cooper et al., 1999; Selin & Selin, 1992). Thirdly - and mainly - a large number of projects seem to fail because of their goals. Deficient contracts, vaguely defined assignments, unclear specifications, or goals that change signi-
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ficantly during project execution are frequent complaints (Kharbanda & Stallworthy, 1992; Pinto & Prescott 1990). Similar criticism is also frequent in newspaper articles and in reviews of public projects (c.f. Von Porat, ~ 9 9 6 )In . other words, too many projects seem to be initiated without sufficient preparation, planning and feasibility studies. Too many decision-makers seem to initiate projects without having made clear what their intentions really are. Criticism concerning imprecise project goals is nothing new. The problem has been a matter of discussion for more than 3 0 years (Art, ~ 9 7 2 Avots, ; 1969). Neither is there a lack of proposals for solutions. Almost every textbook or handbook in the field preaches the importance of clear and exact goals, how these goals should be formulated, how projects should be planned, scheduled, and budgeted, and how they should be assessed in terms of costs, benefits, and risks (Cleland & King, 1968; Goldratt, 1997; Maylor, 1996; Turner, rgqy). The basic message is that a project should never be initiated without sufficient preparation. The same message is also taught during courses and training programs, in corporate directives and guidelines, and in the quality management systems companies use to control their projects (Mulder, 1997). So, why does the problem persist? There are two possible answers to this question. Firstly, practice can (still) be dominated by dysfunctional behavior. This means that the actions of the practitioners have to be corrected so that they match the ideal. Secondly, it could be the normative theory that is unreasonable, i.e. the dominating role model might not correlate with the conditions that practical project managers have to adhere to. If so, it is the theoretical models - not the practical actions - that have to be revised. This chapter departs from the latter interpretation. It argues that an unclear project goal is an intrinsic element of project management per se. Without denying the need for appropriate preparations, we have to accept that stipulated project goals can never be more than qualified guesses about the future. Firstly, stipulated project goals have to be understood as political products based on over-optimistic visions of future conditions. Their primary function is to create project beginnings, not to predict project ends. Secondly, the process of project execution is one of knowledge creation. While the stipulated goal defines the project's demarcations, its content has to be created through practical actions. Through the practical actions of project execution, expectations regarding future outcomes are transformed; firstly because exper-
THE FUTILE DREAM OF THE PERFECT GOAL
iences are gained from actions performed, and secondly because time elapses and future outcomes gradually get closer. At project end, knowledge exists that was impossible to acquire at project initiation. At this point, the meaning of the project's goal is reinterpreted and the demarcation of the project scope is often revised. Ex post, we always know more than ex ante. The rest of the chapter is structured in four sections. Firstly, the basic conceptual model of project management is outlined and the ideal of the project goal that constitutes and controls project execution is discussed. This is the model that will bc critically examined in subsequent sections. In the second section, the political aspects of project selection and goal setting are discussed, with the claim that ambiguities and inconsistencies are natural components of most project assignments. The third section addresses the knowledge aspects of project execution, emphasizing how practical actions change the way the stipulated project goal was initially intcrpreted. In the final section, the chapter concludes with a discussion o n how experiences from performed project actions influence expectations regarding project outcomes. The point is that evolutionary features of project goals are intrinsic elements of every project execution.
The goal - the core of every project assignment Projects are initiated in order t o achieve something: to bring about a change, to construct a building, t o develop a product, t o implement a system, to execute a contract, or t o search for new knowledge.' The basis for the decision to initiate a project is constituted by the expected results following project termination. Thus, the goal is the core element of every project's existence. The intentions behind the project legitimize the whole undertaking. In its purest form, all actions within a project are related t o the project goal. If the goals change, the work of the project changes, and if the project becomes obsolete, it gets ~ a n c e l e d . ~ The chapter primarily addresses projects which have a technical core, e.g. projects in product dcvclopment or building consrroction. The discussion might he applicable to other types of projects as well, but thar is beyond the scope of this chapter.
In this way, Project Management menr hy Objectives".
IS
one of the ultimate and most explicit forms of "Manage-
MATS ENGWALI
The basic model of project management The basic conceptual model is simple: The project is an assignment with limited duration - a contract - given by one actor to another. The former actor is the client (other labels are project sponsor or project owner); the latter actor is the project manager. While the client orders and specifies what is to be accomplished at a certain point in the future; the project manager is in charge of the task's realization. Consequently, project management means coordinating all the necessary activities towards the project goal; predicting future, potential problems; choosing the appropriate technical solutions; and controlling that the project work is on track and within the given scope. According to the model, the project constitutes the intermediate stage in a sequence of three stages: Project selection, through which the client defines the project. ( 2 ) Project execution, through which the objectives of the assignment are realized. ( 3 ) Project assessment, where the final results are compared with the original goals and intentions. (I)
Thus, the project assignment is initiated through a client decision whereby the goal is set and ended by a client decision when the final result is accepted. Between these decisions, the project is being executed (see Figure I ~ : I ) .
Client
Goal
Figure I
The basic conceptual model o f project management.
~ : I
THE FUTI1.E D R E A M O F THE PERFECT GOAL
The logics of project execution The process of project execution has some characteristic dynamics in relation to non-project operations (Archibald, 1976; Engwall, 199s; Selin, 1990). For example, the consumption of resources is typically unevenly distributed across the project's lifecycle. For most projects, a diagram of the cumulative expenditure of resources during their execution resembles an S-curve (see Figure 1 4 : ~ )At . the beginning of a project, few resources are consumed, few people are taken on and the basic planning does not require much expensive equipment or material. While the work is being carried out, more people are taken on, materials and equipment procured and consultants, suppliers, and contractors are contracted. Resource expenditure increases radically. After an intensive period, consumption typically decreases and, toward the end, there are only a few people left to close down the project, carrying out the necessary adjustment and reviews.
Accumulated resource expenditure
Possible influence within defined xope
Figure r4:2 Accumulated resource expenditure and the possibility of influencing the end-result within the defined project scope.
However, the diagram outlining the possibility of influencing the end result is usually described using an inverted S-curve. During the early phases, when little work has been carried out, it is relatively easy to change direction and it is still possible to choose from different alternative actions. These possibilities disappear as decisions are made, as resources are consumed, and as calendar time elapses. At the end of the project, when knowledge of the end result is at its best, there are only limited possibilities of influencing the outcomes, within the specified scope. During this phase, it is often very tempting to propose improve-
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ments and changes. However, since these often mean changing a long series of activities that have in turn been building on each other since project initiation, late revisions are usually both complicated and costly to implement.
Goals demarcating the execution process In order to gain control of this process, the strategy taught in most project management literature is to reduce uncertainty as much, and as early on, as possible during the process (PMI, 1996). Ideally, the project should be so thoroughly planned that the objectives are stipulated in detail and frozen, before any practical action is undertaken (for an alternative view, cf. Eisenhardt & Tabrizi, 1995; Iansiti & MacCormack, 1997). The stipulated project goal should be explicit, specified in detail, internally consistent, and stable over time. Furthermore, the goal should be specified in three dimensions (PMI, 1996):
Performance, what is to be done during the project (some authors use the labels functionalit y or quality) -typically defined in a technical specification. 2 ) Tzme, when the work is to be finished - typically defined in a time schedule, and 3 ) Costs, what amount and which type of resources are allowed to be spent - typically defined in a project budget. I )
These goals should then he broken down systematically into clear and consistent objectives, sub-objectives and milestones, which should subsequently be translated into project activities and work-packages. Since these work-packages are the basic input of project planning and scheduling, this kind of breakdown analysis is taught as the cornerstone for all project planning and scheduling. For practical project managers, this approach usually makes sense: in practice, too many projects seem to be initiated without thorough and well-prepared goals. Furthermore, the practical process of breaking down goals into objectives, sub-objectives, and work-packages is a good collective exercise for the project team. By discussing the project objectives in depth with each other, a conceptual structure of the project assignment at hand is constructed. Problematic ambiguities in the goal, differences in the interests of the stakeholders, and any misun-
T H E FUTILE DREAM OF THE PERFECT G O A L
derstandings can be identified and sorted out. Since a thorough analysis forces the team members t o declare their values and interests, it is also a good team-building experience. The belief that it is possible to define and freeze the project objectives once and for all at the beginning of a project is problematic. However, since the pre-project goal setting process has a significant impact on project execution, this issue will be addressed in the next section
The necessity of goal ambiguity The primary function of a stipulated project goal is to create a start, not to predict final outcomes. At project initiation, it is necessary t o have ambiguous goals that can unite stakeholders with different interests in supporting one and the same undertaking. The ambiguity makes it possible for different intentions and interests t o co-exist during project initiation. Consequently, an ambiguous project proposal can be instrumental in order to pass through the project selection process. However, ambiguous goals outline visionary directions for the future, but they provide few details about actions that are necessary at present. Managing the path from goal ambiguity t o goal formation is thus a core competency of practical project management.
Project initiation and rational decision-making H o w goals are formed and decided upon is little discussed in the project management literature. Instead, the project goal is treated as an already-defined and established objective fact. In principle, all actors are expected to be completely honest and to subordinate all their personal interests t o the overall project mission. A project under execution is usually assumed to have been selected and initiated through a rational decision-making process, wherein different alternative projects have been assessed on the basis of realistically established plans and calculations (Simon, 1957).The project is assumed t o be the logical effect of the way in which the decision-makers have assessed the consequences of each alternative. Thus, the chosen project is seen as the best possible alternative for the situation in question. In many normative theories (e.g. project management theory), the
MATS ENGWALL
model of rational decision-making has the status of a highly desirable ideal for practice. The rationalistic ideal also impregnates the language of modern business, politics, and public administration. However, during recent decades, a large number of empirical research studies have shown that the model is a very poor depiction of how decisions are made in practice. This criticism has addressed all aspects of the decision-making process: the formulation of the original problem, the identification of the possible alternative courses of action, the description of the consequences of each alternative, the evaluation of the consequences, the elimination of some alternatives, and final selection from the remaining options (Brunsson, 1989; Cohen et al., 1972; Danielsson & Malmberg, 1979; Jacobsson, 1987; Lindblom, 1959;March, 1988; Sahlin-Anderson, 1986). In spite of the rhetoric, there are probably few projects in practice that are the result of a rational decision-making process. Project proposals are often controversial since projects are often visible, involve changes for certain interest groups, and exploit resources that could have been used in alternative ways. There is often a high degree of uncertainty concerning both the consequences that the project initiative will have on the future and the way in which the project work should best be managed. Consequently, gaining the necessary support for a project proposal at the selection stage usually requires some form of coalition of decision-makers representing different interests (Baier et al., 1986). Coalition building usually means negotiations. Negotiations normally mean compromises and compromises usually mean reformulations, supplements and changes to the original proposal (Bauer, 1968). In other words, the methods of gaining support for a project proposal are such that they in many ways contradict an efficient implementation process. Instead of precision and consistency, the logic of the decision-making process seems to produce exactly the opposite.
The importance of imprecision In decision-making processes, a proposal seldom gains support by being precisely and clearly formulated, with all the possible consequences formulated in every little detail (Sahlin-Andersson, 1989). This is especially true for projects, where the positive and negative consequences are usually unevenly distributed over time. The negative con-
T H E FUTILE DREAM O F T H E PERFECT GOAL
sequences of project execution (costs, disruptions, and efforts on a relatively short-term basis) are usually close together in time since they are a necessity for creating the intended positive long-term effects of the project. Consequently, the positive effects are often bound t o be visionary rather than concrete. They can seldom be evaluated with the same degree of certainty as the negative consequences. Actually, the very presence of ambiguities can enable different stakeholders t o support a project for different reasons and with different expectations regarding the result. An ambiguous goal can be a means of gaining support by allowing one and the same project t o be seen in different contexts and t o be given different meanings. All differences in interests, expectations, and preferences have to be suppressed during the coalition building, particularly if the proposal risks being called into question (Jacobsson, 1987). Thus, one instrumental strategy for gaining support for a project proposal is formulating the proposal on a principle, visionary, and non-detailed level which allows some ambiguity and inconsistency in the project's content (Sahlin, 1996). Consequently, future sources of conflict are common outputs from project selection processes.
The function of over-optimism There is a considerable risk that a project proposal that has successfully passed through the selection process is over-optimistic (March & Olsen, 1976). This could be a deliberate, conspiratorial strategy by the project's proponents in order t o get the proposal through the decisionmalting process As a professor of civil engineering is said to have taught his students a t the Royal Institute of Technology in Sweden during the late 19 50%: "Boys, you have t o remember [...I that if you are going t o calculate the cost of building a power plant, underestimate your calculations so that construction work can start. There are no power plants that are only half-completed." (Grennberg, 1998: 6) Even though this comment concerned construction work, the principal message is still valid for most projects. However, over-optimism in project goals might not be deliberate. Since there is competition between
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different alternative proposals at the selection stage, it is unlikely that a proposal that is presented cautiously, with detailed, pessimistic calculations and suppressed positive expectations, would gain sufficient political support to be selected. Consequently, there is a much higher level of probability that proposals which actually pass the approval process are based on over-optimistic, rather than under-optimistic, expectations and plans (Baier et al., 1986). However, the observation that the decision-makers deviate, in practice, from the rational model does not imply that they are stupid, untalented, or irrational - only that their behavior does not fit the theoretical model. An alternative view is that decision-making should, in practice, be understood as a means of initiating and achieving collective action, rather than a choice between different alternatives (Brunsson, 1985). Following this view, effective action requires actors who are committed, well motivated and confident in order that they will be able t o manage the task. Furthermore, the action has to be seen t o be "right" and the actors should have high expectations regarding the outcomes of their efforts. The decision manifests the expectations and motivation. Through the decision, the decision-makers have explicitly committed themselves t o a particular option (for example a project). Consequently, an effective decision-making process entails that only a few project proposals are analysed, that only the positive consequences of the selected project are considered, and that the competing alternatives are presented so negatively that they are considered t o be unreasonable. Often, an initial over-confidence seems to be necessary if a project is to get under way at all. To maintain their level of enthusiasm, practical decision-makers have no objection to being kept a little in the dark (Andersson, 1981). Or, in the words of a senior consultant at a Swedish engineering firm: "My experience is that if we specify in detail, at project initiation, what we are going t o do, the client usually becomes negative. It is better t o be imprecise at the beginning and discuss the necessary actions with the client during project execution".
T H E FU'I'ILE DREAM OF THE PERFECT G O A L
The irrelevance of goals to project execution The political negotiations do not end at project initiation - they only move into another phase. Project initiation often means concrete action. At project initiation, commitments are made, contracts are signed, resources are allocated, equipment is purchased, project teams are formed, plans are drawn up, and the actors involved start to coordinate their future activities in relation to each other. During project execution, decisions and actions build upon each other in such a way that the activities of the early phases constitute and create the prerequisites for actions during subsequent phases. All actions within the project are related to previous actions, and previous actions cannot be undone afterwards. Thus, a project that has passed the point of initiation is usually very difficult to stop (Sahlin-Anderson, 1986). Instead, it has t o be changed or adjusted. For instance, project execution usually entails a monopolistic relationship between a client and a contractor (Engwall, 1990;Stinchcombe, 1985). So when the client tries to raise the technical ambitions for the outcome (within stipulated budget and time-limits), the contractor usually tries to get more money (for a technically less ambitious product). Consequently, the execution phase constitutes new rules for negotiations. Facing the risk of a half-completed project, it is often easier to acquire more time and resources for an ongoing project during execution than for a project proposal during the selection phase. In a similar way, there is usually a tendency among other stakeholders to try to maneuver an ongoing project into line with their own opportunistic interests. During project execution, there are often attempts by different stakeholders to attach problems and solutions that happen to be in the environment at the same time as the project (Sahlin-Anderson, 1986).
These political processes primarily concern the demarcation lines between the project and its environment. These processes are important since they gradually define the exact extension of the project scope. However, well-defined exterior demarcations are not enough. In order to create an end-result, the project content has to acquire a meaning. The originally abstract project goals have to be transformed into concrete manifestations. Project execution is thus an evolutionary process wherein expectations regarding the outcomes interact with experiences gained from the performed actions. Gradually during the course
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of project execution, expectations and experiences become coherent and, in the end, the goal becomes definite. Goal formation is thus a core element of project execution.
The idea of an exogenous goal In project management theory, the project goal (as well as its meaning) is created outside the process of realizing it. As an initial input, the project goal is assumed to be an independent variable of the execution process: it influences the process, but is not influenced by it. Thus, the practical actions of the execution process have no influence on the meaning of the stipulated goals. Ideally, all the necessary knowledge should be available during project selection and there should be no unplanned learning during project execution. Consequently, we are supposed to know exactly what we want to achieve and how to accomplish it, right from the beginning. This ideal of an exogenous goal is based on the idea that it is possible to fully specify the content of a project before it is executed in practice. This is a basic assumption about the nature of project management, which adheres to an old tradition in Western philosophy constituted by the belief that true knowledge is the same as theoretical knowledge (Molander, 1997) and that all this knowledge is possible to articulate using exact and unambiguous language (Frangsmyr, ~ 9 7 4 ; Goranzon, 1986; Toulmin, 1991). Adhering to this tradition, mathematical knowledge - with its exact definitions, propositions, and logical deductions - is the ideal. The application of knowledge is also seen as a separate (and subordinated) activity to the knowledge itself. In other words: it is possible to possess knowledge, without necessarily being able to apply it (Molander, 1996).
The learning component in goal realization This separation of goal-formation from goal-realization might be a good description for repetitive undertakings whose execution exploits already existing and standardized knowledge. However, when applied to undertakings comprising any kind of element new to the actors involved, it becomes problematic (Schon, 1983). For such undertakings,
THE FUTILE D R E A M OF THE PERFECT COAL
it is not possible to acquire important knowledge elements by planning beforehand. Instead, they have to be acquired by means of practical actions. In relation to planning and goal-setting activities, which only consist of abstract thinking, project execution means a gradual interaction between theoretical and practical knowledge (Engwall, 2002). During project execution, learning occurs in the tension between the abstractions (theories, goals, plans, etc.) and the experiences gained from the performed concrete actions (experiments, tests, prototypes, manufacturing, construction, etc.). Through improved planning prior to project execution, it is possible to create good knowledge of what ought to be possible to accomplish within the project, which measures ought to be possible to execute, which results ought to be possible to produce, and what consequences ought to be the effects of performed outcomes. However, it is not until during practical execution that it is actually assessed (with any certainty) whether the planned actions were possible to implement in practice and, if this is the case, whether they had the intended effects or not. Hence, during project execution, knowledge is developed with regard to what the project "actually" means. The project goal acquires a concrete (often even physical) gestalt. The participating actors acquire hands-on experience of the project content. In this way, the project execution process becomes a mutual experience. It becomes a shared example (Kuhn, 1962) for the participators.
Practical actions and ex post discoveries of alternatives In addition, the performed actions introduce inertia into the process. Thus, since actions in turn build upon previous actions, it becomes more and more difficult to change direction. Metaphorically, it is like a carpenter sculpting a piece of wood; once the first cut has been made, the process is irrevocable. Each new cut has to be planned and made with respect to the outcome of the previous cuts. As Molander (1996,p. 17) describes it: "The doing is one, irrevocable, definitive. [In advance,] you can speculate about different possibilities and interpretations. Anyhow, the action is the point when we leave the level of pure possibilities and act in one way - the world changes, there is no way back." Consequently, the closer the carpenter comes to the finished product -
MATS ENGWALL
the narrower the range of potential alternative cuts. However, project work has an additional element. Since there is a specified deadline for completion, calendar time is continuously elapsing. Thus, the range of potential actions - within the stipulated project scope - is gradually narrowing, even if no action is taken. For instance, an old rule of thumb states that during the late project phases, when knowledge of the end result is at most its sophisticated, costs can only increase; never decrease (Selin, 1990). However, knowledge that was impossible to acquire earlier might still emerge during the very late phases of a project (Kreiner, 1995). In product development, for example it is not until the first real sample of the new product has been launched onto the market that it becomes possible t o obtain an actual test of how the product is being received (independently of how many market surveys have previously been conducted). Dependent on market responses to these first samples, it might be necessary to adjust the project goals; otherwise the project would not have been of any use at all. Furthermore, at that point, it is always easy to tell what one ought to have known about beforehand (Engwall, zooz). Finally, the preferences of the actors involved tend t o evolve over time due to the learning process of project execution. While the project is being executed, the actors gradually get a better understanding of the practical consequences of the actions being performed (March, 1971). While learning what the project goal means in concrete terms, they also learn what the project does not mean. However, they also learn what the project could have meant with a different history. During the execution process, the participants gradually acquire insights into what would have been possible to accomplish under different conditions, e.g. if they had acted a little bit differently in the beginning, if they had been assigned slightly more resources, but above all - if their knowledge had been a little bit different or a little bit deeper right from the beginning. Thus, even if the wording of the stipulated goal is exactly the same in the end as its initial articulation, its wording will have another meaning in the end. At the end, the goal is not just an abstract text anymore, instead referring t o practical experiences gained from actions, outcomes, mistakes, and successes achieved during execution. It is not until the consequences of decisions are realized that it will be possible to understand, with any certainty, which decision one should actually have taken (given that we have had the knowledge beforehand). Ex post we always know more than ex ante.
THE FUTILE D R E A M OF T H E PERFECT G O A L
Project execution - a process of goal formation The discussion so far can be summarized in two paragraphs. First, project goals are political products. As input into the project process, it is natural that they comprehend ambiguities and inconsistencies, paving the way for politics, negotiations, and interpretation. Second, the meaning of the project goal evolves during the execution process. It is impossible to know everything beforehand. Some insights are dependent on practical experiences gained from execution. Consequently, it is natural that previous ideas and actions are reinterpreted when they are implemented. A stipulated project goal can never be anything more than a hypothesis. In the best case, a goal is a qualified judgement about future conditions and preferences. In the worst case, it is only a guess. The language of project management conjures up a picture of clear, consistent, and stable goals waiting to be transformed into end-results via a linear process implementation. It is the language of a partially frozen world, where there is no environmental evolution during the project's lifecycle and where there is complete and perfect knowledge prior to project initiation. In practice, however, there are probably few project managers who would recognize themselves in such a description. In practice, the conditions of project management are much more chaotic, with goals that are continuously changing and where goal ambiguities and a lack of precision are the means of dealing with conflicts, visionary thinking, but also concrete experience. Since projects have time extensions, there is always a risk that the project environment will evolve in another direction than the one expected, entailing that the project will in the end be evaluated on the basis of premises and experiences which differ from those in force at the time of project initiation. One possible conclusion might he that stipulated goals are only empty phrases and that goal setting is only a ceremonial charade in order to protect the project from opponents in its environment. If so, project goals are unnecessary, except for political reasons. However, this would be neglecting the significance of goals for constituting project dynamics. Goals can be, to varying degrees, open ended, but for most projects, the stipulated goal is more than just an empty symbol. The project goal provides direction. It focuses on a preferred state in the future. It redirects attention from other issues to problems and solutions related to the project. Furthermore, the goal constructs trajecto-
MATS ENGWALL
ries over time: it relates future outcomes to actions and activities carried out today. Through the goal, the actors involved can create a common future. It becomes possible to coordinate the actions of today with expected outcomes in the future. However, in relation to other kinds of goals, the time specificity of project goals makes them distinct. Project goals have traditionally been discussed as a basis for defining the demarcation line between the tasks that do belong to (or ought to belong to) the project and those that do not. This is the function emphasized in most project management literature. Clear, consistent, and realistic objectives are claimed to enable the project manager to gain control over the project execution process. Simultaneously, they are claimed to protect her from being blamed for failures and problems outside the project work. However, the project goal also creates expectations. A t project initiation, there is a stipulated, abstract project goal; there are resources allocated to the project; and there are expectations regarding future outcomes, but also regarding the process of creating the outcomes. Through the execution process, the goals evolve from abstract visions into concrete experiences: words are interpreted, actions are performed, and the world changes. During the course of the process, expectations regarding the project are transformed, due to experiences gained from performing actions in combination with the fact that (calendar) time is elapsing and the predicted future is approaching. Usually, the transformation of expectations has two effects on project execution: ( I ) the project goal is reinterpreted and redefined, and ( 2 ) the project demarcations are renegotiated with the environment. Thus, the distance decreases between experiences gained from actions performed within the project and expectations regarding future actions in the project. At the end of the project, experiences and expectations are coherent. However, at this point, the expectations have a different meaning to what they did at project initiation.
THE FU'I'ILE DREAM OF THE PERFECT GOAL
----------1 ----------Negotiations on dernorcd~ons
Ambiguous Resources Expectation
+
Interpretations of content
/
+
Experience through action
Definite goal De facto results Experience
Negotiations on demarcations
)
TIME
PROJECTEXECUTION
Ftgure 1 4 3 Project execution - a process of goal formation.
Consequently, instead of the image of a linear process whereby the initially stipulated goal is directly translated into a final result, project execution is better understood as a non-linear process of goal formation, revolving around stipulated goals, evolving expectations, negotiated demarcations and gradually gained experiences (see Figure 14:3). The point is that the definitive goal of the end of the project is related t o the experiences of execution and that these experiences are usually not available at project initiation. To conclude; the quest for the perfectly-stipulated project goal is futile. Projects will always be initiated on the basis of vague and limited knowledge of the future and what is politically possible at the time. Projects will continue to be delayed, they will overspend, and they will change in relation to their original intentions. Consequently, there will also be cries for better goals and more detailed specifications in the future, too. However, an understanding that the process of goal formation continues throughout the entire project lifecycle will bring the true nature of project management t o the forefront. Project management is not - as it is sometimes depicted in textbooks - the passive process of implementing already-defined objectives. O n the contrary, it is the active art of creating conditions, meaning, and expectations for the future. Taking this into consideration, project execution is seldom a process of implementation; rather it is a journey of knowledge creation.
Wha
l o
-
jects ?
Yocesses ODERLUND
Introduction The question of "what is" a project may be differentiated from that of "what goes on" in a project. Broadly, we associate the first question with ambitions to define and specify structural characteristics of projects, and the second with various ways of conceptualizing the activities or processes involved. Moreover, while there is considerable agreement in the literature as well as among practitioners as to "what is" a project and the accompanying structural arrangements, we contend there is far less convergence of views of "what goes on" in projects. One central issue concerns the relevance of "rationalistic" accounts of the project process. Above all, it is the traditional "planning-oriented" project management literature that has been criticized for advocating too simplistic recipes and for resting on overly "rationalistic" assumptions. Instead, critics argue, we should acknowledge the prevalence of the not-so-rational processes involved and be open to the fact that even other, alternative "rationalities" are important. Despite the attacks, however, the normative literature on project management still, largely unconcerned, suggests the skilful use of sophisticated planning techniques as a sine qua non for successful project performance. Apparently the view of project processes that is depicted in this planning-oriented project literature is a very resilient one. This should perhaps come as no surprise. The idea that careful and extensive planning should precede action has long roots, not only in project management
WHAT GOES O N I N PROTECTS?
texts, but also in other management literature. Very few would argue that this is not part of the truth. What most critics claim is rather that it is not the whole truth or the most important part of the truth about project processes. In sum we have traditional allegedly rationalistic accounts of these processes as well as a number of good arguments problematizing these representations and suggesting, to a greater or lesser extent, what would provide a better view of project processes. Obviously, these discussions relate to conceptualizations of processes at a high level of generality. Staying with such a level of analysis we will not deal explicitly with process issues, for example at the individual or project group level. Against this background we will continue these efforts to explore the question of how to conceptualize project processes. In doing so we are going to present how some Scandinavian authors have chosen to comment on the planning-orientation of the traditional literature and their ideas of possible amendments. While recognizing the merits of these attempts we believe that especially the implications of "uncertainty" being a characteristic of project processes are still not very well spelled out. In order to take a step forward we suggest here a conceptualization of project processes as constituting problem-solving or knowledge development processes. In this respect we build mainly on Popperian epistemology and some of the writings of Weick and March. Phrased in an evolutionary terminology, we also present a simple three-phase model of the project process, incorporating a pre-selection, a variation and a learning phase. Generally, this model aims at displaying how uncertainty is being reduced in a trial-and-error manner, through iterations, each of which includes this three-phase scheme. Unlike most other critics of the planning-oriented literature this model stresses the importance of specific and relatively stable goals. It also explicitly acknowledges that error elimination and "reality-checking" are vital elements of these problem-solving processes. Such a framing, we believe, is rather easily translated into project practice. Furthermore, the aspects that are stressed in our model are highly significant in many of the firm-specific project process manuals that are used in practice. Finally, while it is true that our approach is a kind of rationalistic endeavor, it is very far from the traditional planning-oriented rationalism discussed above. Instead it relies basically on the idea of "critical rationalism" - a view of epistemology dating back to the Pre-Socratic era of Greek philosophy (Popper, 1998).
LAKS L l N D K V l S T A N D J O N A S S O D E K L U N D
Scandinavian views on project processes Within the normative literature on project management there is a strong tradition of placing great importance on systematic planning and careful a priori specification of project activities to be carried out. This has been discussed extensively e.g. in Morris ( ~ q g q )Engwall , ( ~ y g j )Soderlund , (2ooob)and Berggren & Lindkvist (2001). Below we will refer to this idea as the planning-oriented view of project processes. Generally this view is often discussed and illustrated in connection with the project life cycle as codified in PMI (1987). In the figure below we have also included the somewhat changed terminology of PMI (1996), as the second row in the four boxes.
Concept Initiating
Development Planning
Implementation Executing
Termination Closing
-Figure I J : I Project processes. Source: PMI (1987); PMI (1996).
The basic assumption of such a view is thus that project success is very much a matter of establishing clear, operational goals in the first phase and plans including breakdown and specifications of activities in the second phase. If these two pre-execution phases are well managed the actual project work will run smoothly and predictably. As argued by Christensen & Kreiner (1991), however, the project is then turned into a bureaucratic procedure that may be carried out rather routinely and unconsciously - and when uncertainty is a significant feature such a planning-oriented procedure will tend to be counter-productive. When uncertainty is high, they argue, a goal-setting procedure cannot reduce uncertainty enough. Attempting to further openness, agreement and operationalization as to what isfshould be the project goal would rather be to conjure uncertainty than to deal with it rationally. Instead, they maintain, the critical issue during the goal-setting phase is to "create motivation". Similarly, in the second phase, realistic planning is not seen as an option; the role of plans is rather to provide useful symbolic input for further communication and (again) for bringing about motivation.
WHAT GOES O N I N P R O I E C T S ?
"The plan will match actual outcome, not because plans build on correct experiences and valid assumptions about prevailing circumstances, hut because the plan in itself motivates the participants to reach the planned outcome" (Christensen & Kreiner, 1991, p. 75). These authors apparently think of projects with a high degree of uncertainty; especially they point out the importance of contextual uncertainty, i.e. uncertainty originating from changes in the project's environment throughout the lifetime of the project. In line with this view they also stress that the fourth phase should contain a future-oriented evaluation of what was learnt during the life of the project. Their discussion thus centers on the first two phases and the fourth phase giving less prominence to the implementation or execution phase. Project leadership (rather than management), creating a platform for the "exploratory" work of the project team, is the appropriate mode relating to this phase, they maintain. How the actual project work is carried out is very much seen as a matter for the participants to find out. According to Lundin & Soderholm (1995), a theory of temporary organization should somehow mirror "the apparent action orientation in society today" (ibid, p. 437). Rather than building on the rational assumptions underlying the decision-making perspective the idea is to outline an action-based theory. They thus take issue with views assuming that decisions and goal-setting precede action, that decisions cause action, etc. There may be no logical connections between decisions and actions and decisions may well come after action. More specifically Lundin & Soderholm (1995) note that the major drawback of normative project management literature is that it treats projects as repetitive, ruling out renewal and uncertainty, typical of many project contexts. In a constructive vein they also suggest that the PMI (1987) linear four-stage model of project life cycle phases (concept, development, implementation and termination) should be replaced by a model displaying four slightly different phases (action-based entrepreneuralism, fragmentation for commitment-building, planned isolation and institutionalized termination) that in addition are overlapping with their relative importance varying throughout the project's life cycle. For the most part these changes involve a critique of the rationalism of traditional project management literature in two respects. First, the argument is that the traditional concept or goal-formulation phase does not put due emphasis on the need for entre-
L A R S L I N D K V I S T AKD I O N A S S O D E R L U N D
preneurship and the need to present a convincing rhetoric in order t o legitimize and constitute the temporary organization. Second, with a focus more directly on the issue of planning, they say that "plans are important as action generators, but not primarily in an instrumental way." Instead, they stress the point that plans have symbolic meanings. "Well-elaborated and elegant plans show that planners are competent and efficient and may be trusted with responsibility for the temporary organization. ... Symbolic connotations are as important as the instrumental ones" (Lundin & Siiderholm, 1995, p. 448). Apart from the instrumental value of plans as celebrated in normative project management literature, these plans, by virtue of their symbolic nature, also provide a "space" for action and thus support a kind of symbolically mediated action rationality. Another prominent exposition of the Scandinavian critique of traditional project management rationalism is the edition by Sahlin (1996). Based on their empirical findings, mainly from public sector projects, the contributors argue that project processes display many irrationalities compared t o classical decision theory. Instead of picturing the project process as a sequential process of goal formulation, planning and execution, they especially question the assumption of aprioric goals and the guiding role of plans. Goals, they argue, are most often unclear and shifting throughout the process. What the project is about may then differ substantially among the actors involved. In her contribution, Sahlin-Andersson (1996) develops this idea further, making it a part of a "strategy of ambiguity" which may be necessary in order to establish the project. To be attractive and engaging, a project should be formulated as being dramatic and magnificent, as providing something new, unique and extraordinary. Such a "strategy of ambiguity", she notices, would also benefit those who like to keep critics and opponents away leaving some discretion to those working in the project. In the Sahlin edition, most contributors maintain that plans often have no relation to the reality of project work. Instead of being a guide for action they point at their role as an instrument of persuasion, their role of providing a legitimizing formal (rather than real) control, etc. Actual project work will then be effectively decoupled from both goals and plans. The circumstance that projects do not reach their goals, they notice, does not mean that they do not produce results. The outcome may be
WHAT GOES O N IN PROJECTS?
better or "newer" than what was planned, much more may be learnt and it may not even have been possible to start the project if goals and plans were to be clearer at the outset. In sum, the message announced in the introduction of the book is that the rational model should be abandoned. "Common to most contributions in this edition is that rationalistic ways of understanding projects are rejected - with more or less emphasis and frenzy" (Sahlin, 1996, p. I S ).
A comment. Taking a point of departure in the PMI four-phase model of "what goes on" in a project, we are able to summarize the Scandinavian critique. Apparently both Christensen & Kreiner and Lundin & Soderholm broadly accept the idea of four sequential phases, although they acknowledge that in practice there will be considerable overlap among them. What they take issue with is the notions associated with each phase and the general planning logic that the model implies. Common to them is that they are uneasy mainly with the first two phases. Goals, they argue, cannot or should not constitute a firm corner-stone for the following process. Nor is it possible to carefully plan and specify a priori what activities will have to be carried out. For Christensen & Kreiner it is the high degree of "contextual uncertainty" that turns projects into much more open affairs, where issues of motivation and learning rather come to the forefront. For Lundin & Soderholm as well uncertainty is underrated by traditional literature, leading to its inability to acknowledge the need for entrepreneurship and rhetoric and the symbolic functions of plans. In Sahlin-Andersson similar ideas are displayed and developed more fully into a "strategy of ambiguity" in which the benefits of unclear goals, plans decoupled from actual practice, are also recognized. At a more general level, the critique appears to be directed at the decision-theoretic assumptions permeating traditional project literature and the underestimation of the degree of "uncertainty" typically involved. In order to understand "what goes on" in a project we are therefore well advised to acknowledge the rationalities connected to rhetoric, symbolism and action orientation - all of which would appear as "irrational" from the point of view of classical decision-theoretic perceptions.
L A R S LINDKVIST AND J O N A S SODERLUND
These critical arguments and suggestions no doubt provide a much richer framework and vocabulary for describing and analyzing project processes. Obviously, projects must deal with uncertainty and may well be preceded by many disputes, conflicts, or may involve parties with hidden agendas. Moreover, plans may have a motivational effect or signal that all contingencies have been carefully considered, although little realism is involved.
. .. and a continuation In furthering the ideas described above, one alternative would be to take seriously the fact that many parties are involved and discuss how issues of power and interests are played out in project processes. Another alternative is t o continue on the theme of uncertainty. We will enter this second path and try to carry the discussion a step forward by framing the uncertainty issue within a knowledge development perspective. In doing so, we will adhere t o a definition of "what is" a project stressing the point that projects are characterized by having specific goals. Very much unlike the ideas related to the first of the four phases discussed above, we will thus conceive of such goals as being vital for the process of generating knowledge in projects. As outlined below we suggest that project processes may be seen as goal-directed learning processes. Regarding the second of these phases we d o not disagree much with the arguments presented above; when uncertainty is significant an iterative approach rather than aprioric planning will be efficient (Lindkvist, Soderlund & Tell, 1998). So, in our view of projects, while "what" t o achieve is typically rather well specified, it is very much up t o the team t o find out "how" t o accomplish this, during the project execution phase. In some contrast with the Scandinavian critics, we will accordingly focus mainly on the reduction of operational uncertainty related to the implementationlexecution phase. Essentially we thus delimit our discussion to the project level, mirroring also the fact that the kind of industrial product development projects we have experience of (see Berggren & Lindkvist, 2001) are plagued by lower degrees of contextual uncertainty than those which the Scandinavian critics presumably have in mind.
WHAT GOES O N IN PROIECTS?
Project organization The conception of "what is" a project held by most practitioners is that of a form of organization where there is a group of individuals who should carry out a certain task or solve a given problem. Moreover, the goals to be achieved are specified, including the time and money at the project's disposal. While projects have quite specific goals or expectations, it is up t o the team t o find out how the problems should be solved. Project teams thus typically enjoy a considerable amount of autonomy within limits set. Such a view of projects as a kind of organization form is also typically adhered t o in the literature, and it is not a new one. "A project is an organization unit dedicated to the attainment of a goal - generally the successful completion of a developmental product on time, within budget, and in conformance with predetermined performance specifications" (Gaddis, 1959, p. 89). Letting an organizational unit focus on only one task or problem, and dissolve after its completion is a principle that differentiates the project idea from other organizational forms, e.g. the permanent function organization (see Wheelwright & Clark, 19gzb). Another defining characteristic is that projects have rather clearly specified goals, which differentiates them from other forms recognizing the benefits of goal ambiguity, such as the Garbage Can form (Cohen, March & Olsen, 1972). It should be noticed that the Scandinavian authors referred to above are inclined t o accept rather a lot of such goal ambiguity and still refer to them as projects.
Project organizing Given our view of projects as associated with fairly well specified goals or expectations, it is thus the uncertainty surrounding the issue of "how" t o solve the problem that is brought into focus. In the terminology of Weick (r996), such situations are "weak" in the sense that there is limited or highly ambiguous guidance as to what actions should be undertaken. In these situations local trial-and-error processes may be relied upon to reduce uncertainty.
LARS LINDKVIST A N D JONAS S O D E R L U N D
"People make sense of uncertainty on a small scale by a stable process of collective trial and error that resembles an evolutionary system (Weick, 1979). And it is this small and tight learning process that imposes structure on larger and looser situations. Both stable personality and the stable collective improvisation of local evolution are sources of structure when situations weaken and work experiences come in fragments" (Weick, 1996, p. 44). Such processes may be characterized as "organizing", as self-organizing cycles of enactment, selection and retention. Moreover, Weick argues, projects may be seen as relatively pure instances of organizing. Organizing thus shapes projects, and projects are the medium through which organizing is expressed. Firms working in uncertain environments, where surprises are commonplace, react by creating small groups or projects, dealing with these by improvisation and experimentation. "There is basically no substitute for trial and error in dealing with surprise" (Weick, 1996, p. 54). It is thus such processes of organizing that generate the necessary degree of stability or order that is initially missing in weak or low degree institutionalized contexts. In the projects there is a continual interaction between phases of open interaction and phases where more stable structures are established (Weick, 1995). Through a series of such iterations one may thus, step-by-step, approach a successful solution t o the project problem.
A process model Project organizing thus constitutes a way of dealing with uncertainty.
A project team with a specified goal t o achieve and granted enough autonomy may establish an iterative learning process enabling action in the context of uncertain "how" situations. This is done through a kind of trial-and-error process, the characteristics of which we will consider in more detail below. Consistent with our emphasis on the project goal, we start by identifying some important functions of goals in a project context. We then approach the issue of imagination and variety and
WHAT GOES O N I N PROJECTS?
finally we turn to the importance of critical reflection and learning. A simple figure of the project process is also provided as a summary.
I.
O n pre-selection and the function of goals
Etymologically the term "project" may be traced back to the latin verb
projicere, which may be translated by "throwing forward" (Bergman, ~ g q o p. , 458). Throwing forward we believe is a central characteristic in the "project way" of dealing with problems and "capturing" the uncertain future. The comprehensive goal of the project may here be seen as a long throw into the future, which in turn constitutes a selection context for many shorter trial-throws throughout the project process. Goals in this way establish a pre-selection context that guides and stimulates the subsequent variety of trials or experiments undertaken. In a somewhat different manner of reasoning, Kreiner (1999) suggests that goals are important in allowing project members to establish a division of labor. Unlike in markets, where completely autonomous actors adjust their plans when they collide with those of others, a guiding friction between parties must be established by design. Goals allow the team members to create a division of labor and, based on frictions encountered, to continually suggest adjustments and compromises. In describing evolutionary processes and stressing their trial-anderror character, it is common to identify phases of variation, selection and retention. Such a sequence indicates a biologistic analogy of a rich and spontaneous variation of species that are selected on the basis of how well they fit in with the environment. But if this means "variation first - then selection" the analogy does not fit squarely within the context of firms and projects. Here we always have someone who wants something. Evolution is not only driven by environmental selection but to a great extent "driven from within" by the agents' aprioric aims and understandings (Popper, i q g z ) or enacted (Weick, ~ 9 9 5 )It. is a matter of "guided evolution" (Lovas & Ghoshal, 2000) or "evolutionary engineering" (March, 1994). This is why a pre-selection phase is identified in the model.
L A R S L I N D K V l S T AND JONAS SODERLUND
2.
On variation and guesses
Variation is a second process precondition. Without a rich variation, selection processes have no material to work on. So, when goals or subgoals are established, there is a demand for imaginative and innovative individuals, who dare to guess and try all the thousands of ideas that are typically generated in a complex problem-solving context. That goals or images of what to achieve are inspiringly formulated is then important. Anyway, as it seems, people in general are rather imaginative. But unfortunately our guesses are frequently quite bad and nevertheless we are often unwilling to abandon them. As discussed in Popper (1972), we are strongly inclined to form beliefs in regularities; many times one observation will be sufficient to generate expectations. We also stick to our "theories" and are more interested in verifying them than in falsifying them. Similar human "weaknesses" in the context of organizations are recognized by March. "They are inclined to see historical events as necessary events, ...They use extremely simple rules for attributing causality, . They tend to conserve beliefs by interpreting ambiguous histories as confirmation of their own prior understandings" (March, IqqSa, p. 29).
..
3 . O n critical reflection and learning Exposing our guesses to a critical examination will consequently be important. Following Popper (1999) we need to work according to a methodology that involves conscious and systematic attempts to contradict our beliefs or expectations. By confronting guesses and actual outcome, deviations and surprises are generated, promoting reflection, sense-making and learning. A precondition for such a process of knowledge development through "error elimination" is that we have "reality data" that can withstand our expectations and produce deviations. What should constitute reality data is fundamentally a matter of decision, but as argued by Wandkn (1981) in many cases there are also "hard facts" that are too salient to be ignored or theorized away. That this will often be the case in the context of industrial project activity is a reasonable assumption. Although short-term manipu-
WHAT GOES O N I N PROJECTS?
lation is always conceivable, in the somewhat longer run technical failures, delays, budget overruns, customer complaints, etc., are likely to be rather easily detected. The knowledge development and learning processes described above require critical reflection. Nurturing and "institutionalizing doubt" is thus necessary (Weick & Westley, 1996). To interrupt and interpuncture the project process at certain time intervals is an important means of supporting the individuals' reflective thinking. The frequent use of deadlines, milestones, practical tests and other moments of feedback in practice, may be seen as an expression of such a need for regular "reality tests" of whether expectations are valid or not (see e.g. Lindkvist, Soderlund & Tell, 1998). The trial-and-error learning taking place in projects is a matter of practical learning. Unlike traditional research endeavors, it continues only until a satisfactory result is reached. A related difference is that the problem has to be solved within a certain time frame, or else a solution may not be of any value whatsoever. This means that the process, although imaginative guesses are a core element, must not only eliminate errors but also provide more and more "grounded guesses". So, while error elimination and selection are important in this phase, we must also assume that better and better guesses are generated. Only then will it become a rational and converging learning process. In order to stress this element of "positive" learning, this third phase is signified as "learning".
4. A summa y figure In the analytical model suggested there are thus three phases or types of activities associated with each iteration in the problem-solving process. First, the model underlines that projects presuppose that someone has a problem, an interest or a goal - providing some direction to the creative imaginative efforts. Second, it stresses the need to promote imagination and the generation of a variety of ideas, perspectives, guesses, etc. Third, to compensate for our limited guessing abilities and dogmatism a critical methodology is advocated. Such a model of how knowledge is developed and practical learning takes place through a series of iterations is of course very far from providing a picture that closely resembles the richness and idiosyncrasy of real life project
LARS LINDKVIST A N D J O N A S S O D E R L U N D
work. We do believe, however, that there is also a need for such simplified accounts of project processes - provided they actually catch some of the reality of "what goes on" in projects.
PROCESS PHASE
PRECONDITIONS
1. Pre-selection
Agents and intentions
Pr~blern/~oa formulation l
2 . Variation
Imaginative project participants
Guessing, division of labor, experimentation
3. Learning
Critical methodology
Empirical observation, error elimination, reflection
Figure
IJ:~ The
CORE ACTIVITIES
project process model.
Conclusions In this chapter we suggest that the issue of "what goes on" in projects may be approached from a problem-solving or knowledge development perspective. Moreover, relying on the ideas of Popper and Weick, our way of signifying the project process - by identifying phases of preselection, variation and learning - t o some extent mirrors evolutionary terminology. In a sense, this process view suggests the possibility of a project methodology, a specification of vital aspects that should he recognized in carrying out a project. In this methodology the importance of goals or expectations is highlighted. In order to guide further efforts they should be reasonably clear and specific. Furthermore, the need for critical inquiry and reflection, promoted by various procedures for "reality testing", is stressed. A basic assumption is thus that expectations are clear enough t o be contradictable and that there is also such a thing as "reality data" with power enough to provide deviances vis-i-vis expectations. Obviously, "what goes on" in a project may be analyzed in many ways and at many levels of analysis. Paralleling the approaches in planning-oriented project literature and those of the Scandinavian critics, the terminology used in this chapter is of necessity a rather abstract one, placing many important questions outside of its scope and interest. At the level of analysis chosen, one central issue is the relevance of rationalistic accounts of project processes and possible alter-
WHAT GOES O N IN P R O J E C T S ?
native rationalities. As discussed earlier, assuming a context of less than negligible complexity and uncertainty, the kind of planning-oriented rationality, essentially suggesting a two-phase model of "plan first then execute", is hardly appropriate. The Scandinavian contributors here rightly point at anomalies and contradictions in front of such simplistic images of project processes and suggest that symbolic features and action rationalities may be even more important. In this paper we suggest that yet another kind of rationality should be recognized a critical rationality - operationalized in a three-phase model to be used iteratively in generating knowledge in a trial-and-error fashion.
The following is an edited version of an interview conducted under false pretenses. 1 told Rolf Lundin that I was collecting life stories of scientists - which was literally correct. I merely failed to mention that the size of the sample was I . After the preparation of the present book could no longer be kept a surprise, I asked Rolf for his corrections and approval. I kept the form of an interview, however, because an interview is a genre in itself, as David Silverman always reminds us,' and it is a genre of both interaction and utterance.
BC: Let's begin as one does in in-depth interviews in psychology. "What was the first event that you remember that's connected to your professional life and career?" RL: You know, when you said that you want to talk "about my career"
I was ready to cancel, because I don't feel that I've had a career. I've just lived my life, that's all. It sometimes becomes a straight line when you tell it, but in reality, it just happens to you. It's in the accounting of it that one introduces causal links. But, why not? I can do it like everybody else. So let's start by saying that I come from social class three-and-a-half.= ' "Perhaps, we all live in what might be called an 'interview society', in which interviews scem central to malung sense of our lives." (Silverman, r993, p.19)
' A now forgotten official classification of employzcs in Sweden: group one were people with higher education, group two qualified workers, group three unqualified labor.
THE LIFE O F A P R O J E C T RESEARCHER
BC: ? ? ? RL: My father was a miner and my mother did some cleaning jobs, so we were rather hard up. I was born in Uppsala, but grew up in Dannemora, a mining town where my father had a job. But it was a temporary job, so we soon moved to the region of Vasterls. One early memory is my father telling me, "You know, you don't have to have the same life I've had". Something like that. My parents didn't have any opportunities, economically speaking, to shape their life in a different way, so I felt that all hopes were centered on me. Sometimes I wondered, as many children do: "Are these really my parents?" At any rate, that's what he said: "You need not have the life that I had". Nothing stronger than that. Just as if he'd been struck by the thought. Then there was the school. I was rather good at it, even if it was a small provincial school - several classes in one classroom. The next stage was secondary school. You must know that in my family there was some cousin on my mother's side who graduated from high school, and that was the closest that any of us had come to higher education. The day I was to start secondary school, my mother said just before I left (I needed to travel into Vasteris, because we lived in the countryside): "You know, it's not too late to change your mind. You can finish elementary school and get yourself a job, like everybody else...". So it must have been my own achievement motivation, or something, hecause they never said "You must fight for a better life!", never asked me what happened at school.
BC: How many children were there in your family? RL: I have a sister nine years older; so I grew up practically as an only child. I remember how hard up we were. My father was a construction worker; they scrap construction timber or clean it after it has been used for casting - a dirty, heavy job. He was a big, strong man, who had no other ambitions. When I was adult, he told me that sometimes he didn't know how to get money to pay for my bus ticket - the school was about 8 kilometers away and it was too far to bike, especially as winters were very cold in the 1950s. And then I went to school and started thinking in terms of a "career". I couldn't really talk about it at home. I could speak to the teachers. I
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was always on good terms with the teachers - most likely because I was obedient, orderly, and helpful. What did I want to be when I grew up? A teacher seemed to be a good choice. We admired them and I'd heard that they made good money. At any rate, this was a different job than working in the mine or on a construction site. Then I thought about becoming an officer in the military - I don't know where this idea came from, because there was no such tradition in our family. Perhaps it had to do with the fact that I was taller than the other children and ran more quickly. For a while, at least, because they caught up with me very soon. But for a while I felt like Superman. I finished school in 1962, and went into military service for nine months in rq6zlrq63. I still don't remember what made me choose business economics at university. There was a teacher I liked very much - politically extremely right wing - who made us cheer for Karl the XIIth. But he was very good at mathematics and physics, and so was I. And then I had a chum who was called Bjorn Staberg; he didn't do military service, so he started university earlier than the rest of us did, and enrolled at Goteborg School of Economics and Commercial Law. This could be the reason that my classmate, Christer As, and I applied to Goteborg rather than Stockholm. Christer was very eager to learn, so we studied all the time and didn't have much of a social life. I rarely went out in the evenings and I didn't feel at ease when I did. Still, this was when I met my first wife. At high school I felt very insecure with girls. I never understood them, and 1 must admit that this is true even now. I thought that I'd better dedicate myself to studies. And then there was Christer, who always challenged me in a sense, because he liked to compete and to be best at exams. I still remember the last exam I took - I almost failed one subject. It was called Contemporary Organization Theory and Axel Targama was responsible for it. I had to take an oral, because my written test wasn't good enough. I must admit that it felt nice to be the internal examiner at his doctoral thesis defense some years later. But then it was all over and I still didn't know what to do. My diploma thesis focused on communication as an organizational problem - a speculative work that I did in relation to a project concerning simulation of traffic lights at crossroads. There was a person who wrote a licentiate thesis on this topic and wanted help with communication problems. Now when I see a really bad piece of diploma work, I think of my own - usually to conclude that mine was worse. Because it was
THE LIFE O F A P R O J E C T RESEARCHER
truly bad. It was completely unconnected to any kind of reality - just to my fantasies. Nowadays I'd go to some company, talk to a traffic engineer, visit a municipal unit ... But it was accepted, and next thing I knew I was invited to join another project that had to do with traffic. Walter Goldberg, then professor and chair of Personnel Administration section at Goteborg School of Economics and Commercial Law received some funds from the municipality, and they were all interested in how to make traffic more effective with help of simulation. At Siemens, they'd done a simulation study where they'd shown traffic flow on a screen in the form of white dots wandering from left to right or back. Our idea was to connect one crossing to another, then introduce signals at a frequency that would require the smallest number of stops and the shortest waiting times. It was technically oriented, and we were in contact with traffic engineers in Goteborg. Uno Larsson and I wrote our licentiate thesis together in two years, which, then as now, is quite a short time. I remember when we had our first reunion for the class of 1963, and I was the only one who had a licentiate title. I rather liked the feeling. My colleagues were a bit envious, but I was envious of them, because they were "in the real world" and knew how it was, whereas I was still at school. But I must say that it was great fun, though, even if we worked hard. Walter Goldberg helped us to obtain a stipend from Copenhagen's Technical School so we were able to use their computer, an IBM 7090 located in Northern European University Computing Center, as it was called. It was the biggest computer in Northern Europe at that time. It was very impressive at any rate. Lots of people were employed just to take care of it, and we used the perforated cards. The program itself was a big box, and we could play with changing the numbers of crossings, connections between them, distances, traffic rules, likely behaviors, etc. Eventually we could move it all to Goteborg, when the university received an IBM 360 - the first truly powerful computer in Sweden - but we'd also complicated the model so much that it became very slow. It took the computer one hour to process the simulated events of one hour, so the model wasn't really useful. But we'd learned a lot about simulations, models, operation analysis, and such. After that, I was offered a job of an "extra lecturer" - the f i s t such position at the School of Economics and Commercial Law in Goteborg. It was a new position in ~ 9 6 9It. included teaching. And what a nightmare that was! Walter's idea was that somebody who took a C-course
R A R R A R A CZARNIAWSKA
in administration should be able to teach the very same C-course in administration a year later. So because I knew some things about computers, I was teaching programming. How to make programs to simulate traffic. But then, because I was connected to the Personnel Administration section, I was also teaching there. One course went very well. I'm still proud of it. But I remember some other occasions that were total disasters. Another course in simulation: I had four hours to fill, but I wasn't very experienced. I just told them everything I knew, and it took two hours. And then what? I'll never forget that sinking feeling. I stood there - 23, 24 years old - and they all looked at me. Computers were very important then, together with the belief that mathematics and statistics were the keys to all the problems a company could have. I was good at mathematics and physics, so Walter Goldberg encouraged me to go to the States and learn more about it. The school had a contract with Carnegie Mellon, even if it was mostly in the behavioral sciences. In 1989, Goldberg organized a symposium in Aspenas with, among others, Victor Vroom3 and Herbert Simon, the Nobel laureate. I remember a walk we took in the park. I was walking under the trees, and I thought: "Just think! I'm in the company of the great of this world!" I had an impression of being touched by the wings of history. There was also a statistician, Morris De Groot, a short, small person, but with an incredibly strong voice. I never thought statistics was very attractive, but listening to him one thought it was enchanting. All this contributed to this wish to go to America. Of course America was a promised land for many generations. My paternal grandfather went to America to earn a living. In my generation we went there to study. With industry untouched by the war, they had room to maneuver at the universities that we couldn't even dream about. So I applied for a Ford fellowship and was called for an interview. I traveled to Stockholm and I didn't have to pay for it myself - a new experience for me at that time. The interview took place in a suite in the Grand Hotel, also a new experience for somebody from social group three-and-a-half. The net result was that I was to go to Chicago. It was the autumn of 1970,and I already had two children by my first wife. I met my first wife when I was in my last year of high school. She came with a friend to Vasteris to take a course on arts and crafts, and A famous scholar of work motivation, see e.g. Vroom (1964).
THE LIFE OF A PROJECT R E S E A R C H E R
we were married in the spring of 1964. Our first worry was how to find a flat in Goteborg? I'd been promised a room at a teacher's place on LinnC Street, but the landlady made a mistake and promised the same room to someone else. She gave us another room, but we could only stay there for a month. So I ran around and found a place in a small back building on Upper Hussar Street - a small kitchen and a small room, no heating, gas, no toilet of our own. After that I got a student flat, but we had to leave it when I got my diploma. We moved to Vastra Frolunda (a suburb of Giitehorg) where we at least had a new flat, and we lived there until we left for Chicago. Our first daughter, Petra, was born in 1966 and our second, Anne, in June 1970. SO Anne was three months old when we went to Chicago. But I had a family fellowship and it was enough to live on. It was a shock to come to Chicago. I'd been to the States before, when I was doing those simulations, and I took a tour in 1968. But when we came in 1970, it was the end of August or the beginning of September, and the heat and humidity struck us as if we'd banged into a wall. We took a taxi to a YMCA hotel where we were to stay until we could move into our flat, and the driver told us immediately: "Whatever you do, don't leave your luggage on the street". Then we moved to our flat on 5zndStreet and started to get used to the cockroaches. There was no air conditioning, of course. You know, if you've been out in the cold and come into the warmth of a room, you feel drowsy. We learned that it works the other way around, too. Regenstein Library a t the University of Chicago had air-conditioning, and it was so pleasant to sit there and feel cool. But we felt drowsy and practically fell asleep. Not good for studying. Graduate education was very different in the States than in Sweden at that time, where Walter Goldberg would say: "Read these books and then come and take an exam". In the USA they had courses like in undergraduate education. I chose Management Science because it was my thing and I chose the University of Chicago because I'd met those people from Carnegie Mellon already. But it so happened that many of the people at Chicago came from Carnegie Mellon and had many contacts there. So even though I was at Chicago, my advisor was from Carnegie: Tom Morton - young and very enthusiastic. But the first thing to do was to choose courses. I thought: "organization or personnel administration". But my adviser was against it. Nobody took such courses in Management Science; the proper courses
BARBARA C Z A R N l A W S K A
were in Production Management. So I took those, but I took courses in organization theory and sociology on the side as well. One thing I need to mention is that I hear badly. I'd been in an accident - an explosion - and not only I do not hear well, but I also have an impaired discrimination ability. So when I listened to the lectures and discussions, especially in sociology, I had to guess what they were saying. Management Science and mathematics courses were easier in that sense. In one of those courses I got an idea that I wrote down and showed to my adviser. He became incredibly enthusiastic, and after I finished my dissertation we wrote some papers together. It turned out that my idea could be developed in several directions, all of them useful in Management Science. The idea was that for stock systems in production with concave costs, one could calculate the optimal size of the stock without complete information about the future. I left the paper with my adviser in October 1972, and in April 1973 we went home, my dissertation almost ready. We had three children when we left, because we'd adopted a black baby who we called Par in the autumn Of 1971. I really wanted to go home. I hadn't even been talking on the phone to my parents. We'd only exchanged letters, and we'd been gone for two-and-a-half years. It was fun, even if I would never want to live in Chicago again, but now it was time to go home. I could do the last simulation at home, which I did. And I went back to Chicago in August 1973 to defend my thesis. During our stay in the States, the shortage of flats in Goteborg had developed into a surplus. We found a flat in Vastra Frolunda again, and I had a research job at the School. I tried to continue writing about Management Science, but somehow I didn't feel like it, although it was supposedly my thing. Also, when 1 came back to the Department of Business Administration in 1973, I noticed that everybody seemed down. Everything seemed wrong. Everybody talked about crisis and troubles. There were no students and no money, and Walter Goldberg was away most of the time. I don't know what made me think of it, but I decided to interview them. What was the trouble? When I left in 1970, everybody seemed to be on the top of the world. And now it was exactly the other way around. Also, the interest in Management Science seemed to be lost. On my way back from the States I'd been thinking, "Here I come, a star, a graduate in two-and-a-half years, something that has never happened before, even at Chicago Business School".
THE LIFE O F A PROJECT R E S E A R C H E R
And here, instead of people partaking in my triumph, I found those depressed teachers. "OK", I thought, "I will try to put it into numbers. You say that you have fewer students. How many did you have last year?" And then I drew a diagram. So it all begun with statistics, as I thought that it would be easy to compare what they said with facts. After all, there are registrations figures, and such other numbers. But I soon noticed some interesting phenomena. Everyone was of the same opinion: crisis, trouble, catastrophe, anxiety, uncertain future. But as to the reason, or at least the background to these feelings, here I found a whole scale of explanations. The actual facts behind it did not seem to interest anybody. I really could see the social construction of reality, the importance of that which people experience rather than that which is. I wrote a small essay about it and invited people from the Personnel Administration section to a seminar. They all came; or at least most of them came, listened, said that it was interesting, and then left. Only Sten Jonsson remained, and we talked for a very long time. Then he said, "What if we do a study of organizations in crisis?" Sten had, at that time, done studies of investment companies and had a lot of insights, but hadn't done anything with them. And as we'd heard that the municipality of Goteborg was in crisis, we studied it. Goteborg had too few flats in the 1960s, so the municipality made an enormous investment in the construction of new flats, creating a flat surplus and a budget deficit. As a result, it landed in an economic crisis that was supposed to be cured with changes in the administrative system. We had no access problems because a great many of our colleagues from School worked there. So we interviewed people and heard this story that you've surely heard many times since: about overall budgets, about the longest escalator in Europe that was to be built in Goteborg, and so on and so forth. We were surprised, as we'd expected some kind of an analysis of a present situation, and they'd regaled us with stories of the past instead. In the meantime, Walter Goldberg became the head of an institute that was a part of Wissenschaftszentrum in Berlin, and we went there to write what was to become "Myths and wishful thinking as management Perhaps I should not say so myself, but I think it is a very
' Jonsson, BC Lulldin (1977)
BARBARA CZARNIAWSKA
good article. My high evaluation might have to do with the fact that for me it was a total relearning - writing in a completely different tradition. On the one hand, it was only then that I understood that an operation analyst is a very lonely person, at least an operation analyst in the US tradition. It was pure mathematics that one did, sitting alone in one's office. In operation analysis, one never had a reason to go "out there", to the field of practice. On the other hand, there was a large group of people who were interested in the results. Also, because I'd graduated so quickly, I hadn't used up my fellowship, and I had enough money left to go to a Management Science conference in Tel Aviv and present my dissertation. Harvey Wagneri was in the audience, and I remember that he came to me afterwards and said: "Yes!". I could easily have stayed in that field. Sidney Davidsson, who was then the Dean at Chicago School of Business, called me in the autumn of 1973 and asked if I wanted a job. I said that unfortunately I have promised to stay in Sweden that year, but perhaps next year? But then I started to interview my colleagues, and then we went to visit the municipality, so "next year" never materialized. Sten and I didn't have any special analytical tool, although we transcribed the interviews in detail. But most important for the analysis itself, I thought, was the time that took us to drive home from the interviews. Luckily there were always red lights on A ~ e n u e ,so ~ we had many chances to analyze the interviews. As you know, this essay was published in Prescriptive Models of Organizations, and Bill Starbuck made us revise it several times. He wanted us to write a text that was short, direct, and well-articulated. Perhaps that's why I feel it was good. Walter Goldberg and Ulf af Trolle had also interviewed people in Goteborg in connection with their work, "Need municipal taxes g r o ~ ? " S. O~ between these two papers, Goteborg municipality was being interpreted as a manic-depressive organization. The people we interviewed liked it, and they liked "to be there", in the text. It created an opportunity for a dialogue that I appreciated very much. Soon we started doing it en masse, so to speak. There was the story of Vasterbs, See e.g. Wagner (1969). T h e main street in Goteborg. Goldberg, 81 af Trolle ( ~ 9 5 8 ) .
THE LIFE OF A PROJECT R E S E A R C H E R
the story of Malmo, and a similar one about Alingsls. The story about Malmo was called "The Lord's anger is the birth of w i ~ d o m " .Stellan ~ Malmer and Bjorn Brorstrom went to Lulei and wrote "Lulei after two days of hockey". Soon there was a small group. Perhaps it was Sten Jonsson who kept us together. At any rate we began to receive money for research, and that was new! The "myth and wishful thinking" study was donc during working hours and fuelled by our personal enthusiasm. When we were still in Berlin writing our paper, I received a letter from my wife. She wanted a divorce. I couldn't understand it. Our adopted son, Par, was only 4 years old, and our biological daughters, Anna and Petra, were 5 and 10.I took this letter very hard, and tried to work through it, but my heart wasn't in it anymore. I felt like I'd been hit by lightning. When I came back, I was given custody of the three children, and I lived alone with them in the house we'd bought in Kungbacka. I went to the office, feeling that I wasn't taking proper care of the children; then I went home, feeling that I wasn't doing what I ought to at the office. Even before I went to the States, I'd worked halftime as Director of Studies, and later 1was asked if I wanted to be head of the department. It seemed like a perfect job in the peculiar state of mind I was in then. It was so easy, and I didn't need to care, didn't need to be deeply cornmited - it worked smoothly anyway. It seemed that all that was needed was to listen to what people had to say, then summarize it. It was very different from my previous way of relating to my work with a total commitment. I remember that we had a very sensitive recruitment problem, and the then-powerful professor of marketing was involved. I asked him to come to a board meeting and invited him to present his point of view, and then said "Thank you. Now we know what we needed to know. Thank you for coming". I could hear him unloading his fury outside in the corridor, but I couldn't have cared less. I knew I was doing the right thing, that the conflict could have degenerated if he'd been allowed to remain. I was awarded the title of Associate Professor in 1976,~and soon after began to apply for chairs. The first was close to Management "Hermns fruktan ar vishetens begynnelse" is a motto wrirren on one of Malmoe's secondary schools. Docent; in Sweden, like in the traditional European system, it is a title, not a position.
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Science; I believe it was called Production Management and was in Goteborg. The second was in Lund, and the guy who got it was Head of Personnel in Malmfalten during the big strike." Those of us who didn't get the job used to joke that his main merit was his participation in this historical event, and who knows if he hadn't caused it himself. Jokes apart, at that time one had to give a trial lecture during the interview for a chair, and it was a first for me. I came to Lund the day before, but I couldn't sleep all night. The best I can say about my lecture was that it ended exactly when it was supposed to end. And then came the opportunity in Umed. It was sort of obvious to me that I needed to become a professor - the achievement motivation again, or something. Also, at that time I met my second wife. She was perfectly beautiful, always attracting attention wherever she went. She was also divorced, with two children, so all of a sudden we had five children. We were married in 1978. We became very close, much closer than I was with my first wife. When my first wife left me, I discovered that she was a person I did not know. I was so much closer to my second wife, but she was very unstable, and it wasn't easy to have all these children. But I applied for a chair in General Management in UmeH, and I got it. My second wife lived there something like a year, perhaps less. In the spring of ~ 9 7 she 9 returned to Goteborg. It was not unproblematic to come to Umei. People were afraid that I would start to introduce "Goteborg order". I was the only professor, and I had a lot of teaching to do. The expectations were extremely high, internally and externally. There were people there who hadn't met a professor in a long time, and here I was - and the same age as they were, too. I was 3 5 when I came to Umei, and most people at the department were between 28 and 3 6. The university was rather young, too; it had been founded in 1966. There was money and there was room for initiative, but there were also many conflicts. One thing I didn't like was that there were a great many unfinished doctoral dissertations. So I saw to it that they were finished, something that I'd already tried to do in Goteborg when I was an Acting Chair there. Then the idea of a School of Business and Economics - a section within the Faculty of the Social Sciences - was born. It was an ambi'"In 1968, the workers in the mines went on strike against the Swedish state, the owner of the mine, in spitc of the union\ decision not to.
T H E LIFE O F A PROJECT RESEARCHER
tious plan. It was to be a big department - although small compared with Goteborg, where Business Administration alone had three or four professors. In Umed it was a small group, but with a lot of diverse ideas, and not many outside contacts. It was as if there was nothing outside. There were a great many students, many from the neighboring part of Finland, who didn't have university economics. At any rate, in the mid-1980s we had the feeling that we had to do something more distinct out of this kind of education. Start recruiting people in the real sense of the word, and see to it that students graduate in time. I was trying to instill this thought about the School, and whenever there was a problem, I used to point out that we could have avoided it if we had had a Business School. I started to perceive that as a project, as a result of a random exchange with Siiren Wibe, professor in economics. He came to the cafeteria once and asked me: "So how are things with that School of Business and Economics there?" He didn't mean much, I imagine, but I thought: "I will show you all yet!" It wasn't easy, because the university had a history of being "red", especially the sociology department. The School of Business was automatically perceived as the capitalist lackey, and all that. But people became more and more convinced. I talked to Lars Beckman, then-President of the university, and asked his opinion. "Hum," he said, "It doesn't sound bad, not bad at all." So I mobilized myself, and called Sven Johansson, who was the County Governor at that time. I said to him: "You know, I've been thinking that we could start something like a Norrland School of Business and Economics here. Could you imagine supporting such an initiative?" He said, "Yes", without hesitation. To think that I rang him because I did not dare to go and see him in person! What remained was to convince people at the university, and this was not easy. The economists said: "What's that now!" The business administration people were more convinced when they learned that there was external help. It was very important that the president's office was behind the idea. There were a lot of letters to write and they did that. Sven Johansson managed to mobilize all the important people in industry around this idea of a School of Business and Economics in Norrland." We went to LuleH, Ostersund, and Sundsvall and tried to " For traditional reasons, degrees from professional schools are mure appreciated by Swedish employers than those from universities. Thus faculties and deparrments at universities try to exploit the old brand names, creating "schools", which, however, are now closer to the US tradition (faculties) than to older European one (Hochschule).
BAKBARA CZARNIAWSKA
sell the idea of a multi-campus school with a center in UmeH, because Umeg had the only complete university. They were not interested, and forbade us to use the name "Norrland School", but the County Governor was not easily discouraged. We had often been to his residence at 8:00 on Saturday mornings. He was very enthusiastic and helped in many ways. Handelsbanken donated SEK I 5 million and he soon turned it into 35. And don't forget that we are talking about the end of 1980s. That was a lot of money then. At that point the president's office founded a formal organization called School of Business and Economics, basically against the will of the economists. We also had advice from the then-President of Carnegie Mellon, Richard M. Cyert, and his aide, Bernie Goldsmith. All in all, it became quite conventional, but we did get donations; we could recruit new professors; and we did create a brand. I also remember, when I came to UmeH, that T was quite surprised at the party-going life style that was prevalent - very different from Gothenburg. We had quite a few Finns, and when they party, they party! It was very much a youth culture, and that time should have been past for me, but I'd never been in a situation like that before. So I had to participate, even if I didn't always think it was much fun. But we had a big party when we inaugurated the School in 1990, and that was fun. During all my time as the School's Dean I was very stingy, but that party was big. We had a brass band and something like 1000 people in our biggest lecture hall. Representatives for the entire Norrland industry were there. It was a moment of triumph, although those sour economists sat there making faces. I almost forgot the journal! I don't remember exactly how it did begin, but I had been thinking that Swedes publish so little in foreign journals, it would be good if they could get a little training. We discussed it at a conference in Copenhagen in 1983, and then we contacted Doxa, a publisher from Lund. The owner had a somewhat mixed reputation, but he was enthusiastic, and wanted to publish something "exquisite", he said. There were people from other Nordic countries, but the Scandinavian journal of Management was mostly a Swedish initiative: Sten Jonsson's, Lars Engwall's, and mine. I was the founding editor, and did many things quite intuitively. When it came to the Editorial Board, I contacted people who I'd gotten to know over the course of years, and everyone with the exception of Herbert A. Simon agreed. He said he had too many other things to do, but he thought that it was
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a very good idea. Jim March immediately sent a paper, and I didn't know what to do with it. But I sent it to three independent reviewers, who came back with very harsh comments. But you know what?
BC: Let me guess: they said that his English had to be corrected?
RL: No, no. Two of them thought I had written it myself. I was rather pleased, but I was less pleased with my situation. They had quite a few strong comments. So I sat down and wrote a letter to Jim, and told him to react. I met him some years later, and he was so pleased: "You know, I don't get enough criticism nowadays!" I really liked doing the editing. I received heaps of submissions from Finland. It was as if they had all those papers in their drawers waiting for an opportunity to let them out. Some were good and some were less good, but I liked the job. It was a bit like that with the School: had I only known what it really meant before I even began thinking about it... But I hadn't, and maybe that's the reason anything ever gets done. About four years later, though, I felt that it was too much, and Sten Jonsson took over the editorship. At a certain point I was tired - with all internal conflicts, all the work. But then I found a hole in the ice that let me slip up and catch my breath. It was Anders Edstrom, who suggested that I could start working for FA-rldet.lZI went to Stockholm and met Hans Wirdenius, originally a psychologist, who was responsible for research in the construction industry. We decided to do a study of a corporation called Dios, a very well known construction company in existence since 19 I 8, whose founder, Anders Dios, was still alive at that time. It was a family firm that landed in trouble in the 1980s. They decided to recruit a managing director from outside - a construction engineer whose name was Nils Nilsson. Really and truly, that was his name. So we went to study this company. I've been shy all my life, but what I did not expect was that Hans, who was 20 years older than I, was even more shy, if possible. We sat there, at the FA-rldets office in Stockholm, and waited for Nils Nilsson to come to be interviewed. A couple of minutes before the appointment, Hans turned to me and said: "Right! You run this, and I'll take notes". I didn't even know where
" An independent Council for Research on Enterprise and Work; it does not exist anymore
BARBARA CZARNIAWSKA
their money came from; I knew nothing about them, but I could see that there was no way out, In came the guy, a military type if I ever saw one, with steel gray eyes - I don't know if you know what I mean those eyes that look at you and you have the feeling that they can see through you. It was the most difficult interview I have ever conducted. Whenever I formulated a question, he would turn those eyes on me and I would think, "What an idiotic question!" We tried to depict Dios as Nils Nilsson saw it when he joined the company. At that point, Dios employed five thousand people in Sweden and abroad, but everything was concentrated on and around Anders Dios. It was a family firm: grandchildren all over the world were the owners. We interviewed Anders Dios, too. It was very interesting, because Diiis and Nilsson were opposites. It was also difficult because if I have hearing problems, Anders Dios did not hear a thing. We gave him written questions. He was very tall, almost two meters, with arms that moved like windmills, 94 or 95 years old. He took our questions and didn't pay any attention to them, just told his story. He was totally uncontrollable. We learned that he was in his office seven days a week. His driver worked for him for the whole week, and they went visiting construction sites. He did it even after he fractured his thighbone in the bathtuh. People at the site feared his visits but looked forward to them. And then there was Nils Nilsson, whose main task was to change the company and its culture. It didn't work: his rational, bureaucratic, and analytical style was opposed from the very start. Finally the twelve owners got together and appointed a new managing director. Dios died, and the company turned into a real estate company that still exists. Hans and I tried to describe all this in our book." Nils Nilsson took a look at our manuscript and said: "I didn't think you were going to write about me. 1cannot even show it to my wife!" Eventually it came out right. I liked the book, and it gave me a break from this work of organizing the School.'" Hans was involved in the Project Management Institute since its inception, and we went to several conferences to present our work on Dios. We met with a very good response, and I became interested in
"
Lundin, & Wirdenius ( ~ 9 8 9 )
Project Management Institute (PMIB),founded in 1969, is a nonprofit professional association in the area of Project Management. It has over 70,000 members worldwide (HYPERLINK "http://www.pmi.org", accessed o r o j o g ) .
"
THE LIPP, O F A PROJECT RESEARCHER
projects as a theme and a trend. We were joined by an economic historian, Eskil Ekstedt, and Anders Siiderholm from the School in UrneH, and we applied and received money to study projects in Swedish business and industry. The book published by Routledge is one result of this." It was fun to write it, although it took longer than we planned. We didn't live as we preached, but we had so many interesting discussions that I finally had to remind my co-authors that we had a contract with Routledge.
BC: You seem to be forgetting the special issue of Scandinavian Journal of Management dedicated to project^.'^ I tell all my students to read it. RL: Yes, we did it on the side. We tried t o mobilize Swedish researchers, so we organized a conference in Lycksele in 1994.At that tlme we didn't know of many: Mats Engwall at Royal Technical School in Stockholm, and then my doctoral students, Johann Packendorff and Tomas Blomqvist. At that point we even got some money from the Swedish Council for Working Life and Social Research to make a survey of the area, and that was the basis for Johan Packendorff"~licentiate thesis, which must be the most quoted ever. But then he writes so well. So he wrote a paper for this special issue," and then Anders Soderholrn and I tried to theorize around the issue, and this paper is also quite well quoted.18 I even got a Frenchman to write for us Christophe Midler. He came to the Lycksele conference, too - 3 5 people from all over the world. Some people still think it was the best workshop they have ever been to. And it wasn't a bad special issue, either. Midler organized the next conference, in Paris, and already there were 5 5 or 60 people. One of them was Francis Hartman from Canada, so we suggested that the next conference should be in Calgary.'' The latest was in Sydney in zooo; the one in 2002 will be in Rotterdam, organized by Rodney Turner, who is the chair of the European '' Ekstedt, Lundin, Sijderholm, &Wirdenius (1999).
" Packendorff ';
(1995).
Packendorff (1995).
'' Lundin, & Soderholrn (1995). '9
Both conferences have been documented in edited books: Lundin (1yg8) and Lunditl, & Hartman (zoooa).
BARBARA CZARNIAWSKA
equivalent of PMI. And PMI numbers 100,ooo members in zooz. When I joined them in 1995 they had 17,000, and I thought that it was the most gigantic conference there could be - thousands of participants. So you could say that the interest in projects was spreading. Even in Umei, our numbers were growing. And all this happened because I was tired of administrative duties and wanted to return to research, and because Hans Wirdenius needed somebody to do the Dios project. So it was a great sorrow to me when he passed away, right in the middle of editing of that Routledge book. I miss him a lot. But there is another culprit who helped to send me the way of projects: my partner, Laila. I met her after I went through my second divorce, sometime during the summer of 1979. She's an architect and she took her job home quite often. I don't mean to say that she worked at her drawing-table, but she talked about construction projects: how difficult it was to realize them, how people withdraw from their commitments, or how things get muddled up.. . I remember a beautiful winter day, sparkling snow, when we walked and she told me about her work, and then 1 thought, all of a sudden: "Here is a potential study object! Construction companies are responsible for projects, and we used to study companies, but why not study projects?" In this way, we ended up having a common professional interest, even if she wonders over the idea of studying it. What is there to study? After all, it is obvious. But we talk about it a lot. Besides, she's a very good watercolor painter, practically professional - she has had exhibitions and such. One exhibition had a theme, or rather I christened it "Gnarled houses" - all these dream houses she isn't allowed to draw at her job. So you see this topic is an extension of our jobs into our personal lives, and a connection between us. We get along together very well, she and I. BC: Do you live together?
RL: Yes, since 1984. We were meeting regularly since 1979, but at first it was too complicated to move together, with children and all. She has one son and one daughter. But we have been living together a long time, and I know her family very well. Her mother was an exceptionally good person. I don't think she ever spoke with malice about anybody in her life. She died at the same time as Hans. It was difficult to get used to the thought that they left.
T H E LIFE OF A PROJECT R E S E A R C l l E R
BC: So, what are you going to do now? RL: (laughing) If I only knew! I've studied projects quite a while now - it'll be something like a ten-year anniversary soon. I have a black notebook where I write down all my good ideas. There aren't many pages left in this notebook. I don't know. The project theme attracts much attention and many people, so it becomes almost overcrowded, if you see what I mean. Then it also becomes more and more specific, so we're back where we started - at the engineering level. What was a bit exotic now becomes omnipresent. But I'm still keen on co-organizing that international conference, because it is stimulating. This contact network that we have all over the world is very special, and the combination of scholars from economic sciences, social sciences, and engineering is special too. The other summer PMI had its first research conference. Previously the meetings were mainly for practitioners. I was an invited speaker at that conference.
BC: Does this mean that you're not afraid of public speeches anymore? RL: No, not any more. 1 believe that the fear had to do with my upbringing. My mother and my father weren't shy at home, but it was only my father who was somewhat outgoing. He would play a sort of a charming urchin, especially after few drinks, while I was much more inhibited. I remember those frightening experiences when I had to make a presentation at school or stand up in the front of the class. I remember that my best friend told a story of Little Red Riding Hood and the wolf and everybody laughed at him. He was 12or 13 years old, and he felt destroyed. Luckily for me, I could play the accordion. I could take it and play a piece, and what could they say? At the most, the teacher would say: "Didn't you tap the rhythm a bit too fast with your foot?" That was about all the criticism 1 got. But it has always been difficult to speak to a bigger audience. I tend to think of myself as a very bad lecturer. All my energy goes into surviving the experience of standing there in front of an audience. But now I've got over it. I've noticed that in some contexts I'm really quite good at it. I was president of a Rotary Club at the end of the 1980s, and it was part of my duties to introduce every meeting, so I had to find something new to say every time. And I noticed that it wasn't so difficult after all. It's easy to get people to laugh and to relax. So now I
BARBARA CZARNIAWSKA
actually like to give speeches at celebratory dinners and such. I don't speak for long, but I try to do it well. One of the members in the Rotary Club tells me whenever I meet him: "You were the best president we ever had." It could also have to do with the fact that for a long period I had so many troubles and sorrows that I simply could not care less. When people told me to give a talk or teach a course I would think: "If they don't like what I do they can take somebody else." Whereas before, I tried to be perfect, and it didn't work. I watch my son, Par, with a certain envy. He's such a happy-go-lucky type; he never worries. He plays football like a god. Not only does he look like a god, but also plays football divinely. Like I dreamed about being able to play. The inhibitions of youth weigh heavily over life. But with age, people are more prone to listen, as well. When I began to serve as the adviser for the Swedish Council of Humanities and Social Science Research, in a group where everybody was very loquacious, it wasn't easy to get my ideas across. Now I've noticed that people listen to what I have to say. This is a new feeling. It hasn't been my experience before. It must be age. Things change with age. Think that one of my most raving adversaries at the time when I was working to create School of Business and Economics turned out to be one of the people behind the proposal to award me the Nordbank Scientific Prize for 1999. They gave me SEK ~oo,ooo,which is practically all my fortune, considering how poorly we are paid in this profession. But, you know, now and then, deep inside, I feel again like that little boy who dreaded a presentation in front of his class. Post Scripturn (Rolf A. Lundin)
Since the mock interview was made, I was head-hunted for the deanship of JIBS (Jonkoping International Business School). I accepted the challenge and have held the job since May 2001, so I am no longer at Umei. Reading the interview chapter under these new circumstances was quite an odd experience. When I finished the first reading, I know exactly how Nils Nilsson felt ("I cannot even show it to my wife!"). The story is simply incoherent and too much of "I" and "me", extremely egocentric. On the other hand, Barbara asked me about my life story. But some of the material is also very close to the forbidden area -things you generally only talk about if you know that you can confi-
T H E LIFE O F A PROJECT RESEARCHER
de what you say to the listener - the ethical aspect. And even at that, so much is left out. 1 mentioned only a few of "my" 3 0 or so Ph.D.s. Professor Kerstin Sahlin-Andersson is not part of the story, even though she wrote "my" first (i. e., her) thesis on projects. It also appears that too much of feelings and whims rather than planning took over my past life. In general, my generation does not like to think of itself in that way. O n the other hand, one of the seven theses at JIBS during my first year as Dean is all about emotions in managerial work.'' In a sense, that thesis might legitimize this kind of approach of relative openness. So all in all, 1 have decided t o go along with the suggestion that the interview be made public, even though I am not too happy with my own contribution to the piece. Considering the contents of the chapter, I cannot help but wonder what the story might have been if Barbara had interviewed me on another day and in another mood. My guess is that the story would likely have come out differently. Thus, a serious question I have for Barbara concerning the narrative genre is: "What can you learn from life stories of this type?"
BC: I leave the answer t o the readers.
" Rrundin ( 2 0 0 2 )
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AUTHOR PRESENTATIONS
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Author presentations Barbro Anell is professor of management at the Umed School of Business and Economics. She is currently working at the Center for Regional and Tourism Research, Denmark. Her main research interests involve change on different levels of society, from the single firm and the region to supranational institutions like the EU and the role of competition in driving change. A central theme is the evolution of island economies. Maria Bengtsson is Ph.D. and associate professor in Business Administration at Umed School of Business and Economics. Her main research focus is on cooperation and competition in business networks. She has also investigated new organizational forms, their impact on business relations and organizing processes. Among her publications is the book Climates of competition (Harwood Publishers, 1998). Tomas Blomquist is assistant professor at Umed School of Business and Economics. His research interests are project management, relations between firms and projects, and working life in projects. Barbara Czarniawska holds the Skandia Chair of Management Studies at Gothenburg Research Institute, School of Economics and Commercial Law, Goteborg University. She is also a titular professor at the European Institute for Advanced Studies in Management, Brussels. Her research focuses on control processes in complex organizations, most recently in the field of big city management.
Eskil Ekstedt is professor at the National Institute for Working Life and the School of Business, Stockholm University. His research has been in the field of economic and organisational development and its relationship with knowledge formation. At present the focus is on local transformation of business and working life. Co-author of "Neo-Industrial Organising" (Routledge, 1999). Mats Engwall is associate professor at Center of Innovation and Operations Management at Stockholm School of Economics (SSE), Sweden. He is also research director at the Fenix Research Program, a joint
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venture between Chalmers University of Technology and SSE. He also holds a visiting position at Umed School of Business and Economics. His research revolves around issues concerning project organizing, project process dynamics, multi-project settings, and the management of Industrial R&D. Jessica Eriksson is a doctoral student at the Department of Business Administration, UmeH School of Business and Economics. Her research interests include cooperation and competition, industrial change and the organizing of projects. Her thesis deals with changes in the Swedish dairy and brewing industries during the 1990s. Sten Jonsson holds the chair Scandinavian Management at GRI, School of Economics and Commercial Law at Goteborg University. He held the Accounting & Finance chair at the same school 1976-96, was the editor of the Scandinavian Journal of Management between 198s and 2001, and chairman of the Scandinavian Academy of Management during its first 7 years. He has published internationally on team work and o n regulation of good accounting practice. He is currently doing research on communication in multi-cultural teams (product development, integration of mergers). He is doctor honoris causa at Turku School of Economics and Commercial Law. Henrik Linderoth is assistant professor at Copenhagen Business School. He also holds an assistant professor position a t Umeg School of Business and Economics (USBE). He received his Ph.D, from USBE. His research interest primarily focuses on the management of IT-mediated change processes, and how use of IT can be developed in organizations. Lars Lindkvist, is professor of business administration at Linkoping University. He is on of the leaders of the research program "Knowledge & Organization", focuslng on project organization and knowledge processes. Articles have been published in Journal of Management Studies, Organization Studies, and Scandinavian Journal of Management. A recent book was edited by Berggren & Lindkvist, 2001. "Projekt. Organisation for mdlorientering och larande", Studentlitteratur.
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Christophe Midler is research director at the French National Research Council in the Polytechnique Management Research Center, Ecole polytechnique in Paris. He is also professor at Ecole des Mines in Paris and at Marne la Vallie University. His research topics are project, research and design management, in relation to organisational learning theory. Some publications in the area, "Uauto qui n'existait pas", Dunod, 1994,Project as Arenas for Renewal and Learning (ed. with R.A. Lundin, Kluwer Academic publication, 1998 and Innovation Based Competition & Design Systems Dynamics. (in collaboration with Benghozi, P.J., Charue Duboc, 2000. Paris: L'Harmattan). He is a Doctor Honoris Causa from Umea University, Sweden. Tomas Miillern is associate professor at Jonkoping International Business School in Sweden. His current line of research includes new and innovative forms of organizing, strategic and organizational change, and leaders' use of rhetoric. Among his most recent publications are 2 chapters of the book Organizing (zoor), edited by prof. Andrew Pettigrew (London: Sage). Zorica Nedovic-Budic, Ph.D. is associate professor in the Department of Urban and Regional Planning at the University of Illinois at UrbanaChampaign. She received her doctorate at the University of North Carolina and her research focuses on the implementation and diffusion of geographic information systems technology, interorganizational coordination, and human factors in information technology. Joham Packendorff is senior lecturer of project management at the Department of Industrial Econonomics & Management, Royal Institute of Technology, Stockholm. His current research focuses on project work from an individual perspective, and on ~roject-basedentrepreneurship. Author of books and articles on project management, he also works as lecturer and consultant. Johann holds a BSc and a PhD in Business Administration from the Umel School of Business & Economics.
Jeffrey K. Pinto, is the Samuel A. and Elizabeth B. Breene Fellow and professor of management at the School of Business at Penn State Erie. His research interests lie in the area of project management, information system implementation, innovation, and organization theory. The former editor of the Project Management Journal, he has published and consulted widely on project management topics.
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Kerstin Sahlin-Andersson is professor of management at Uppsala University, Sweden. She has published books and articles on the global spreading of organizational models and standards, organizational changes in the public sector, and the organizing of large projects. Her most recent research has included a research program on trans-national regulation and state transformation. She recently edited, together with Lars Engwall, The Expansion of Management Knowledge: Carriers, Flows and Sources (Stanford University Press, 2002). Elisabeth Sundin, is professor at the Natiohal Institute of Working Life and at the Department of Management and Economics at Linkoping University. Her main research areas were SMEs but are now the relationships between large and small organisations instead. She sometimes uses a gender perspective. Anders Soderholm is associate professor in business administration at Umei School of Business and Economics and is currently serving as dean of the school. His main research areas are temporary organizations, new organizational forms and related issues. Co-author of "NeoIndustrial Organizing" (Routledge, 1999). Jonas Soderlund, is assistant professor a t the School of Management, Linkoping University. His research centers on project management, project organization and temporary organizations. Soderlund's most recent publications have appeared in Organization Studies, International Business Review and Project Management Journal. He is currently coordinating the national research and education initiative Svenska Projekt. Timothy L. Wilson - presently visiting professor of marketing, Umei School of Business and Economics. Recent research has focused on industrial marketing topics, service strategies, regional development, and competition - especially in, among, and as affected by small businesses. He was in research engineering and management for 15 years early on in his career.
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Rolf A. Lundin' is professor and dean at Jonkoping International Business School, Sweden. He was born in Uppsala (north of Stockholm) in 1942. He grew up in Vasteris and graduated from upper secondary school (high school) in 1962. He attended Gothenburg for his undergraduate university education and received his business degree in 1966. Three years later, in 1969, he received his licentiate degree after defending the thesis "Upon Some Methodological Problems Arising in Connection with the Formulation and Application of an Urban Traffic Simulation Model" written jointly with Uno Larsson. The thesis showed how traffic flows could be handled more effectively. He was hired by the University of Gothenburg as an instructor in business administration after graduating, but left for the U.S.A. when he received a scholarship to pursue Ph.D. studies at the Graduate School of Business, University of Chicago. He received his Ph.D. there in 1973 after the successful completion of the thesis "Planning Horizon Procedures for Production-Inventory Systems with Concave Costs." Upon returning to Sweden and the University of Gothenburg, Rolf was appointed assistant professor at that institution. Rolf's research focus changed after graduation when he started to investigate organizational problems and public sector development. One of the major publications from this period was "Myths and Wishful Thinking as Management Tools," (jointly with Sten Jonsson, published in 1977 in Paul Nystrom & William Starbuch, eds., Prescriptive Models of Organizations, North HollanflIMS). He and colleagues also published frequently on public sector problems and ways of dealing with budgeting issues in public organizations. In 1974 he was promoted to associate professor and in 1977 to acting full professor and head of the department. Shortly thereafter, in 1978, he was appointed professor in business administration at the University of Umei. He continued to publish books and articles following the tradition in Umei in studies on small businesses and "organizational economy" (e.g. Lundin, R.A., 1986, "Organizational Economy - The Politics of Unanimity and Suppressed Competition," in
We have edited this book as a way of showing our appreciation for Rolf A Lundin on his 60'~ birthday. Rolf's research and theorizing has truly inspired all chapters in this volume. For this reason it seems natural t o include a presentation of professor Rolf A Lundin among the author presentations.
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R. Wolff, ed., Organizing Industrial Devtlopment, Berlin, Walter de Gruyter & Co.). He was also appointed chairman of the department. In the early 1980's Rolf initiated the publication of the Scandinavian Journal of Management. He was the journal's first editor 19841987 and took the journal from new and unknown to a recognized journal in the field. Another major effort of Rolf was the development of the Umei School of Business and Economics. His initiative to create a business school at the University of Umei campus by combining the resources of five existing departments was a major effort. He was appointed the school's first dean during the period 1989-1993. In the late 1980's Rolf's research focus turned to renewal issues and organizational change. He conducted a niajor study of the Dios construction company (Lundin, R.A., Wirdenius, H., 1989, "Foretagsfornyelse och Kulturskifte - Erfarenheter frdn Dioskoncernen [Company Renewal and Cultural Change - Experiences from the Dios Concern], Norstedts, Stockholm) and a critical review of the renewal capacity of the construction industry (Ekstedt, E., Lundin, R.A., Wirdenius, H., 1992, "Conceptions and Renewal in Swedish Construction Companies," European Management J o u r ~ a lVol. , 10, N.o z, pp. zoz-zoy). More recently, he identified projects as a major theme of activity in current industrial organizations and in particular the use of projects as a vehicle in organizational change and renewal. In addition to the extensive empirical and theoretical studies he has been involved, he took the initiative in the creation of the International Research Network o n Organizing by Projects (Irnob). Irnop held its first conference in Lycksele, not far from Umei, in 1994. Papers presented at the conference were later reviewed and published in the Scandinavian Journal of Management in 1995 (Vol. 11, No. a). He was the editor of that special issue on projects and contributed to it with an editorial and an article (Lundin, R.A. & Soderholm, A., 1995, "A Theory of the Temporary Organization," Scandinavian Journal of Management, Vol. 11, No. 4, PP. 437-455). Irnop conferences have been held in paris (1996), Calgary (1998), Sydney (zooo) and Rotterdam (zooz). Both the Paris and Calgary events resulted in edited books (Lundin, RIA. & Midler, C. eds. , 1998, Projects as Arenas for Renewal and Learnkng Processes, Norwell, M A : Kluwer Academic Publishers, and Lundin, R.A. & Hartman, F. eds., 2000, Projects as Business Constituents nnd Guiding Motives, Norwell, MA: Kluwer Academic Publishers). Besides the articles and books
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mentioned above, Rolf's main publication within the field of projects and temporary organizations has been Neo-industrial Organising Action, Knowledge Formation and Renewal in a Project-Intensive Economy, published by Routledge in 1999. He continues to work closely with industrial and university colleagues around the globe. He was appointed a member of the Swedish Project Academy in 1996 and became the Academy chairman in 2000. Together with Swedish industries and a network of universities in Sweden, he founded Project Sweden in 1999, a network to promote research, education and university-industry cooperation in the field of project management. Rolf took on a new challenge in 2001 when he was recruited for the position as dean of the Jonkoping International Business School. He has since moved to Jonkoping and is approaching his 6othbirthday, still looking for new projects to initiate and/or implement.
