76 Long Range Planning, Vol. 26, No. I, pp. 76 to 85, 1993 0024-6301/93 $6.00+ .

00
Printed in Great Britain ~ 1993 Pergamon Press Ltd

Implementing Strategy Through

Project Management
M. Alexander Lord

This article reports findings from a study of 20 U.K. engineering engineering construction sectors2 Each sector is
construction businesses which demonstrate the potential of involved in contracting and selling its design and
using projects to achieve diverse strategic objectives: regulat-
ing internal markets, managing subcontractors, forming part-
management through projects rather than using
nerships around projects, experimenting with new areas of projects as an adjunct to its mainstream production.
business and selling project management expertise. The Both are comparable in that they use projects to
companies maintain flexibility by creating "market" arrange- coordinate highly specialized and professional staff
ments which spread risks and focus expertise among subcon- but each has developed its own distinct organiza-
tractors, using project management to maintain a degree of
control Project management sets detailed targets for achiev-
tional forms and working practices in response to
ing particular goals. Resources can be identified, problem contrasting strategic pressures.
areas highlighted and general progress tracked. Implemen-
tation is ensured by project managers who are skilful negotia- Through a total of 60 focused interviews with
tors and delegators. project managers, directors and senior engineering
staff, the research aimed to explore the internal and
external factors which determined the introduction
and operational effectiveness of projects in the two
In a recent review of strategic issues, R a i m o n d and industries. In order to retain anonymity, each
Eden 1 concluded that provision for the implemen- business has been given a fictitious name.
tation of corporate goals was a critical weakness in
many strategic planning models. By focusing more Table 1. Companies visited with number of
on what needs to be done rather than how it is to be employees
achieved, corporate planners may have failed to
Defence Contractors Engineering
appreciate that competing pressures can in practice Constructors
subvert certain key objectives.
Air Systems--380/7000 on site* Bronsons--850
After more than 30 years evolution, from a plan- Defweapons--1400 Fraser Jones--600
ning methodology associated with techniques such Fleetcraft--5000 Joiners--2500
Seascape (Design)--1500 Eastwood~00
as P E R T and CPM, project management has finally Seascape (Production)--800 Palmers--210
come of age. N o longer simply a middle manage- Airsupport--1200 Eurobuild--250
ment tool for planning, organizing and controlling Communico---800/1500 on site* Woodhouse~750
human and other resources, project management Inflight--1600 Smith and Baxter--272
can n o w be regarded as an essential means of turning Shield Systems (Design)--2500 Dickens U.K.--900
Shield Systems (Prod'n)--2500 Dickens Europe--600
strategic objectives into operational ventures.
Recognizing this challenge, the last World Con- *The secondfigure indicatesthe total number of employeeson the site
gress on Project Management took 'Management visited.
by Projects' as its central theme, acknowledging the
growth of project-based approaches in sectors as
diverse as construction, health care and financial Projects in a Strategic Context
services.
Firstly, it is worth defining projects as opposed to
This paper reports findings from a study of 20 any other activity which might be used to imple-
businesses in the U.K. defence contracting and ment an organization's strategic goals. Archibald 3
suggests that projects can be defined as 'unique,
complex efforts involving many tasks and disci-
Until recently Dr M. Alexander Lord was a teaching fellow at Henley
Management College. He has now joined the Prison Service as a plines that have specific objectives relating to (1) the
Higher Psychologist. nature of the end results, (2) when the results will be
 Implementing Strategy Through Project Management 77

achieved, and (3) how much money and other Although the use of project management was a basic
resources will be expended in the process.' sampling requirement of the present study, it is
important to emphasize that despite similarities in
We now need to establish the rationale for using size and economic performance among most of the
project management. While writers on organiza- organizations in each industrial sector, there were
tional design have focused on the resources and wide variations in how projects were integrated into
managerial implications of using projects within a the organizational structure.
matrix structure (e.g. Davis and Lawrence, 4 the
present findings suggest that project management is Amongst the engineering constructors, for instance,
now being used in multiple ways to realize diverse the dominant 'task force' arrangement by which the
strategic objectives. majority of staff are removed from their normal
functions for the duration of the project was
Since the 1970s, the original optimism expressed conspicuous by its absence in one company. This
concerning the use o f projects or other lateral company, Eurobuild, differed from others in the
organizational units to break down bureaucratic, study in that it was European-owned (as opposed to
functional hierarchies has been tempered by criti- U.K. or U.S.) and refused on grounds of cost and
cism of the matrix form. Probably the best known maintaining engineering integrity to remove all but
critics are Peters and Waterman 5 who argue that a a core planning team from their normal depart-
desirable organizational quality is 'lean staff, simple ments. Instead, they preferred to use what they
form'--something which they explicitly argue the called 'project specialist leaders' who were 'mini
matrix contradicts. project managers planted in a discipline', contend-
ing that 'clients rarely ask people to be a captive
Even this view has been questioned because many of audience'. This also circumvented the problem for
the 'excellent' companies in the survey have entered most staff of reporting to both project and func-
a period of decline in recent years. Closer examin- tional managers and thereby diminishing their
ation of particular cases has revealed the use of contact with specialist peers.
matrices in different operating divisions and there
are other examples of matrix arrangements working Similarly, among the defence contractors, the
very successfully. For example, Galbraith and projects varied from a specialist group of designers
Kazanjian 6 found that the decentralization afforded working within distinct product groups, to a small
by a well managed matrix structure, enabled planning team which had to work with engineers
relatively large businesses to diversify their products based in their normal departments. Although
and enter global markets because new operating attempts had been made to redress the balance in
ventures were not constrained by the existing favour o f projects by creating what the engineering
hierarchy. director at Air Systems called 'a strong project
identification rather than a matrix spread', none of
Increasingly driven by tighter contractual control the companies had gone as far as creating a fully
and rapid technological/market change, project dedicated project team.
organizations are able to expand and contract their
managerial structures to reflect such changes. In The essential point here is that organizations in both
more 'stable state', functional bureaucracies, such industries were able to exercise what John Child 7
changes in the volume and nature of business described as 'strategic choice' in developing distinct
(whether positive or negative) would be highly structures as a response to apparently similar market
disruptive. conditions. Rather than acting as a constraint,
projects can and should be used in diverse ways to
A good example were the U.K. and European realize diverse strategic objectives.
business branches of the Dickens engineering con-
struction company which had sustained enormous In our research, we found that projects and the
fluctuations in their volume of business without any project management methodology are being used in
major reorganization. At the European branch there various ways in five broad areas summarized in
had been a gradual decline in business with its full- Figure 1.
time staff dropping from nearly 1000 to below 500
by the mid-1980s. By winning a major contract in Each of these approaches is described in the
eastern Europe, this figure rose rapidly to 600 staffin following sections.
a task force occupying two floors of the building. As
long as core staff in each functional area were
maintained, the company could swiftly move them
in and out of projects with fluctuations in business, Regulating Internal Markets
supplementing shortfalls with as many as several As the total quality approach has gathered m o m e n -
hundred agency staff. Even more dramatically, tum, projects spanning the whole product lifecycle
Fraser Jones based in central London had seen its have enabled greater coordination of effort. Project
core stafffall from 1100 to 600 in the space of a few planning and control methods are concerned with
years, employing 200 agency staff. setting performance criteria against which progress
78 Long Range Planning Vol. 26 February 1993

New Areas
of Business
?
Selling

a ps

Project Management
Expertise

Managing Subcontractors

Figure 1. Using projects to implement strategies

can be monitored, and they are proving an ideal quality, delivery within schedule and at a fair cost
means of regulating 'internal markets'. Recent from their design and production facilities as they
innovations in information technology have ena- would from any external supplier. This was being
bled project teams to monitor the work being done supported in several of the defence contractors by a
through interactive computer-based packages. competitive tendering policy which allowed pro-
jects to contract out for services which could be
For example, the relationship of the two branches of provided more competitively (time, cost, quality)
Shield Systems essentially depended on project elsewhere. Hence, Air Systems with a group of over
planning approaches. At the London-based design ten other divisions and a total of 7000 employees on
branch, project management had been adopted ' . . . its south-east site, had chosen on grounds of prompt
to create product identity and task accountability delivery rather than cost to subcontract for castings
. . . the buck stops here'. One project manager work instead of using the site machine shop.
admitted that he was not a 'computer person' Beardsworth et al. 8 have called this an 'inside
because he focused on 'wider systems aspects rather contractor system', arguing that the dynamics of
than details', working closely with a technical subcontracting can be created within a large
programme manager who was responsible for organization by forcing functions to compete for
compiling plans and budget proposals, entering data project group or business unit patronage.
on the planning and control system, and using this
to control Shield Systems' production facility For the engineering construction companies, pro-
150 miles away on the south coast. ject management was the prime means of ensuring
that senior management priorities were built into
From their point of view, the Shield System's every contract. At Eurobuild, for instance, one
production project managers used planning outputs project manager explained, 'The emphasis is on
to schedule manufacturing time and to ensure the technical adequacy rather than engineering expense
delivery of relevant supplies. Even so, one senior . . . There is a fine dividing line between preventing
project manager admitted, 'We use simple com- over-engineering and satisfying the client. You
puter-based networks but people won't look at don't get pats on the back for Rolls Roycing
them if they run beyond two sheets.' Indeed, long something.' This company was unusually proud of
before production delivery dates are fixed by the its engineering expertise, selling this as a major
design team in London, the south coast branch sends attraction: 'Time and cost are important but
a representative to early planning meetings to ensure Eurobuild places particular stress on client relations
that 'producibility' is considered. - - y o u ' r e only as good as your last job, whatever the
need for financial recovery.'
In several o f the organizations studied, project One company, Joiners, has taken this a step
managers were demanding the same standards of further by obtaining the British Standard for
 Implementing Strategy Through Project Management 79

Quality, BS5750, and supporting this with a total every level, and, most significantly, implementation
quality management programme. It is n o w standard of strategic objectives is ensured through a series of
practice to start major projects with team-building projects.
workshops involving a representative cross-section
of both the Joiners and client organizations. The overall major project (often called a 'program'
by U.S. practitioners) can be seen as a collection of
mini-projects which each, in turn, subscribes to a
c o m m o n logic. To use an analogy, the relation of
Managing Subcontractors each work package to its mini-project and each
Following the 'market' form of control, consider- mini-project to the overall programme is dictated
ation of transaction costs has led many organizations by the client strategy in a similar fashion to the
to contract out to organizations with the relevant replication of a crystalline form from its most basic
expertise, thereby spreading risks reducing over- molecules through the whole visible structure.
heads. Jarillo and Stevenson9 have argued that
transaction costs often work against any financial The conclusion reached by Usdiken et al., 1° is
benefit in principle of working cooperatively relevant to the present study: 'In construction,
through subcontractors because of the practical strategic orientation is reflected in the bidding
limitations of losing management control over the behaviour of the firm, and the resultant combin-
production process. ation and variations over time in the types, sizes and
locations of projects that it undertakes.' As a project
In the defence contractors visited, government manager at Palmers admitted, bidding for increas-
pressure for freer, competitive tendering had forced ingly risky lump-sum contracts in an ailing business
major companies to act as 'managing contractors', may only exacerbate the decline: 'The company sees
sharing out any work that could not be performed everything as a risk to its s u r v i v a l . . . Its rarely opts
easily or cost-effectively on site. out of a contract but often over-prices it.'

Although the engineering construction companies While project complexity may increase the extent
are operating with multi-million pound annual of subcontracting, a company may have to balance
turnovers, most employ only a few hundred this against its commitment to inhouse production
permanent staff (from 210 at Palmers to 2500 at and the strategic objective of maintaining produc-
Joiners), preferring to sub-contract to specialist tion quality. Nevertheless, a clear finding of the
companies and individuals. With an increasingly present research is that the U.K. engineering
risky 'lump sum' (i.e. fixed price) component in construction and defence industries have been
their contractual arrangements, the organizations driven towards subcontracting by client pressure
studied had developed the following methodology and economic necessity. Usdiken et al.'s reservation
to spread risks: that this threatens control over the production
process has been explicitly recognized in the
(1) A specialist planning company is contracted by imposition of project planning and control tech-
the client on a time-hire basis to produce a niques supported by increasingly powerful integrat-
detailed specification of the scope and design ing information technology.
requirements to be executed.
(2) This specification is then used as a basis for
tenders from potential prime contractors. In a Partnerships Between Stakeholders
highly competitive environment where man-
power rates are publicly available, the tendering Clients in both defence and engineering construc-
company can gain an advantage only by tion industries demanded a clear single point of
maximizing staff productivity and reducing responsibility and communication. In this focal
costs. position, the project manager can also ensure that
any knock-on effects of action or decision taken
(3) Since payment depends on actual work per- inside and beyond the host organization minimize
formed, the successful prime contractor and the
disruption to the project as a whole. As Ouchi 11
specialist planning company (on behalf of the
suggested, the traditional boundaries or organiza-
client) monitor project execution very closely.
tions are becoming less well-defined, leading the
(4) Extending this logic, the whole project becomes focus of our analysis away from a consideration of
a series of specialist work packages (represented flows of power and influence within a distinct
for planning purposes on a work breakdown business unit. Ultimately, he argues, that the mutual
structure) which can be subcontracted on the benefits of a cooperative market ~irrangement may
basis of competitive bidding. lead complementary organizations to form partner-
ships and strategic alliances bounded by what he
In sum, for the strategic planner in the client terms the 'clan' form of control.
organization at the top of the contractual chain, this
process ensures that costs are kept to an absolute Although very much in its infancy, companies were
minimum, responsibility for risks is identified at starting to set up direct communications links
80 Long Range Planning Vol. 26 February 1993

between themselves, clients and suppliers. It was key jobs. As well as the usual milestones, they are
becoming impossible for any party to deny access to insisting on intermediate check points--as many as
information as facilities for direct interrogation of 200 in a 3-year project!' However, he actually
databases was being demanded at each level of the praised Bronsons, his former employer, for provid-
supply chain. Many of the engineering firms were ing what he called 'cosmetics', concluding, ' . . . if
considering information links through electronic you're infinitely flexible, you keep falling down.'
data interchange (EDI) although the feasibility of
this investment depended on a longer term relation- A m o n g the defence contractors, Fleetcraft had
ship than individual project contracts. recently entered into partnerships with both a
European defence contractor and a major civil
In subsequent follow-up interviews at Joiners, the systems designer/manufacturer, demonstrating that
training manager had no doubt that where its clients security (in the sense of defence and commercial
were concerned, ' . . . we've gone from an ethos of protection) is not an insurmountable problem for
being combatative to collaborative arrangements this industry. A large company such as Air Systems
- - w i n / w i n . ' However, in a subsequent interview was working in partnership with a small, single-site
with the director responsible for planning systems, it specialist contractor, Airsupport. W h e n the project
became apparent that direct hardware and data links managers acting as 'opposite numbers' in the two
exist only for major clients and, in one case, even this companies were interviewed, neither had any doubt
had lapsed with the completion of a particular that the joint venture would have been unworkable
project. With contractors such as Joiners taking on without the philosphy and practical tools of project
more risks in lump-sum projects, they were quite management.
happy to provide improved electronic mail, fax, and
voice links with direct read-only access to materials For example, a senior project manager at Airsupport
management and general progress data, but they noted his company's growth from a 'cottage
drew the line at detailed costings. Below this level, industry' in which expertise in mechanical design
suppliers and subcontractors had been reluctant to and electronic systems had been organized an
invest in this technology due to its expense in a separate divisions. The 2-year old matrix structure
period of relative recession, choosing instead to had been developed in response to high growth,
transfer paper-based reports or computer discs. increasing efficiency and creating a clear role for his
position: 'Project managers provide a customer
Regardless of the degree of systems integration interface, funding, stage monitoring and they make
between different partners in projects, cooperative choices between the design department's solutions
arrangements were being formalized between con- - - i f they cannot find their own'. His opposite
tractor and clients. An internationally k n o w n number at Air Systems explained a subtlety of this
chemical business had chosen to enter into a formal approach: We're the overall managing contractor,
partnership with Joiners precisely because it pos- answerable for the ultimate delivery of this project,
sessed expertise in project management, computer- but in mechanical design issues we have to accept
aided design and was one of the largest employers of that the Air-support project manager is king'.
chemical engineers in the country. The company
brought its methodology for re-using process plant The traditionally close relationships between
designs from 'hard copies' to Joiners experts who defence contractors and the M o D had been neces-
created a remote computer link in order to produce sary to share test equipment, maintain technical
an even more efficient CAD application of the standards and links with other systems. Develop-
technique. ment costs had effectively been subsidized by an
informal 'preferred contractor status' for those
Even though competition at the bid stage might be prepared to build up R & D in specialist areas. This
extremely intense, within a free contracting en- was being tempered by greater emphasis on com-
vironment, engineering construction companies petition and, in particular, by the introduction of
such as Palmers would hire out staff to more increasingly fixed price contracts. A project
successful competitors. In addition, the engineering manager at Defweapons explained, 'The M o D is
constructors were maintaining often substantial getting more sharp-witted these d a y s . . , they like
client teams on site. Such teams could ensure this hands-off approach because the risk is firmly on
continuous communication between client and the contractor.' The downside for the client was
contractor, although the relationship was not summarized by a project manager at Shield Systems
always harmonious. For example, the U.S.-owned (Production): Customers rarely ask you to com-
company, Bronsons, had changed the nameplate promise over procedures. Otherwise it would be a
above its main entrance and built a wall across an cost penalty for the customer to rewrite a pro-
open-plan project office to suit the whims of a client. cedure.'
Even so, it still held meetings in private session to
'get our story straight' before talking to client
representatives. N e w Ventures
A project manager at Smith & Baxter explained that One of the greatest barriers to innovation is not so
'Clients are getting more involved--even in turn- much the shortage of new ideas as the organization's
 Implementing Strategy Through Project Management 81

inflexibility incorporating them within the existing (Shield Systems, Production); and 'Risks are only
structure. By its very nature, any new venture such encouraged insofar as their assessment enables a
as an original product or service does not fit easily comparison with expected p r o f i t . . . The question
with the status quo, often requiring a realignment of is: 'when do I call in the projects director?'
existing resources and thereby crossing existing (Defweapons).
departmental boundaries.
In other words, broader strategic risks were really
In even the most mature, 'stable state', functional the concern of senior management, the function of
bureaucracy, different departments need to establish projects being to quantify and monitor actual
procedures and working practices for the flow of expenditure. The Defweapons case is particularly
client inputs (sale orders) through design and interesting because it reveals a conscious attempt to
production to deliverable outputs (products or rationalize a strategy for winning new business. It
services). Such arrangements, however, are nor- can be see from Figure 2 that a fine balance must be
mally a tradeoff in favour of control over set struck between long-term, in-company investment
interdependencies at the expense of flexibility to in the technical skills base ('private venture capital')
create new forms and relationships. and the income from studies and, ultimately, major
projects.
Because a project is usually a one-off, contractually-
bounded venture, many companies are trying out Such a closed-loop approach, however, is not in
new ideas and markets by redirecting existing itself proactive because it can only evaluate the
expertise (both internally and externally) through return on existing R & D in terms of income
'matrix' arrangements. Projects cut across existing generated by projects. Put more bluntly, with fewer
functions and can employ external resources in and less profitable projects, there will be an
whatever way best suits strategic objectives, acco- inevitable decline in product development, creating
modating potentially enormous creativity and a downward spiral and making the company
innovation. susceptible to takeover.

The emphasis on diversification was far more With the exception of Communico's telecommuni-
marked among the engineering construction than cation ventures, none of these companies had
the defence contractors. Having specialized in oil, developed viable strategies for entering non-defence
gas and petrochemical installations since the oil markets. Clearly, the demise of cost-plus contracts
b o o m during the 1970s, companies were being was placing internal efficiency higher on the
driven by the falling oil price into various new corporate planning agenda but long-term planning
markets: engineering construction for power, ferti- for the subsequent unprecedented reversal in the
lizer, pharmaceutical, paper, and food processing international arms race was noticeably absent in this
plants as well as specialist ventures such as the industry.
Channel Tunnel. With a strong skills base in process,
mechanical and civil engineering, credible bids
could be made for radically new areas of work. Selling Project Management as a
Smith & Baxter had been set up a few years
Service
previously by its parent group to exploit oppor- Communico was different from the other defence
tunities in nuclear plant design but, due to lack of contractors in that it was developing control systems
growth in this area, it was moving back towards gas for civilian as well as military clients. Through its
installations and new business such as optical fibre work for the U.K. telecommunications industry, it
plants. Emphasising that staff are only productive had entered a phase in the late 1970s/early 1980s of
when actually employed on project task forces, the offering a collection of standard products which
engineering director pointed at the four main could be customized through special projects to
functional areas on the company chart, saying, 'That meet the needs of particular clients. However, as the
is where people go when they have nothing better head of projects explained, this had engendered 'a
to do! strong bias towards the delivery of hardware'. In
practice, he continued, 'We used to be more likely
A m o n g the defence contractors, the debate essen- to be clobbered for overspending than credited for
tially concerned the degree of investment in R & D quality control.'
which could be tolerated without the guarantee of
business from their one major client, the Ministry of In order to maximize profits from the provision of
Defence. In these circumstances, an industry-wide, services, he argued that, '[Communico] is beginning
idiosyncratic view of risk had emerged: 'Although to see itself as a supplier of customer solutions using
it depends on the amount of money in question, standard products.' In order to make this happen,
major risks require 100 per cent certainty in the the company effectively created 'a matrix turned on
present climate' (Fleetcraft); 'I never take a risk its side'. Project managers became k n o w n as 'major
unless I've got the funding in my hand. In fact, account managers' and were given direct authority
prefunding is an unwritten law of the company' over sales, customer services and product managers.
82 Long Range Planning Vol. 26 February 1993

J Customers J

I Major

J Studies

Technical Capability
Projects

1
Investment
m

Skills/ J
Technology Product
Base
-I Base
I-

Central Applied Product Other

Research Research Development Products

1 1
I PrivateVenture Investment I

Figure 2. The flow of investment between research, product development, and the return on projects at
Defweapons

Even so, they still had a 'dotted line' link to the solid core', leaving the company to specialize in
engineering and production because these functions what it does best. She cites Miles' phrase the
has resisted a complete reoganization: 'Things are 'corporation as a switchboard' as an apt description
less than ideal because the company is orientated of a strategy in which the business becomes the
towards production rather than towards successful c o m m a n d centre for a network of other organiza-
projects.' tions. Without formalized commitments to
branches of itself (the 'corporation as department
Similar scepticism was expressed at Inflight where a store'), such a business has far greater flexibility and
programme manager confessed, ' W e think that we strategic focus becomes its central concern.
can repair a lot and provide technical publications
and training but that is not enough'. Although the In the companies which we visited, this approach
defence contractors were experiencing difficulties in was a matter of necessity for engineering construc-
dealing with less business and the introduction of tion companies seeking to cover their overheads and
tighter fixed-price contracts, a gradual 'paradigm to keep their core workers occupied in the absence
shift' was occurring from what the operations of complete turnkey projects. A relatively successful
director at Seascape (Production branch) called 'an company such as Joiners had an engineering design
end-product bias' towards the creation o f ' a systems and construction services section which sent special-
house'. Air Systems adopted managing contractor ist engineers in a consultancy role to oil and
status but subcontracted a large proportion of the petrochemical sites around the world. At a South
business to relatively small, specialized companies American refinery, for instance, Joiners' engineers
such as Airsupport. produced construction feasibility and detailed
engineering plans to minimize disruption in a
Likewise, Usdiken et al. 12 have observed a tendency refurbishment exercise. The w o r k included concep-
amongst large construction contractors to specialize tual planning networks and transport surveys for
in winning and financing projects, leaving subcon- delivering components in a congested refinery but
tractors to execute the actual work. As Moss the actual w o r k was conducted by the client's
Kanter ~3wrote, 'The strategy here is to divest all but management team and its subcontractors. In this and
 Implementing Strategy Through Project Management 83

a similar middle-eastern project over a two-year improved communication, team work and general
period, 35,000 manhours involving expert staff discouragement of competition. A typical remark
were charged out to clients. came from a project manager at Joiners: 'This
company doesn't encourage pure competition--the
emphasis is on teamwork--individual careerism is
dampened down.' This view was reinforced by the
Controlling Project Implementation widely held opinion that incentive schemes could
The preceding sections have demonstrated the not be implemented fairly in principle: 'The
potential of projects for implementing various projects sets it own goals within the program-
strategic objectives but they have indicated varying me each job is distinct and we don't have anything
levels of project manager authority and specific like piece-work' (Woodhouse).
problems within the two industrial sectors which
we investigated. In this final section, the project Intrestingly, Moss Kanter 16 has described competi-
manager's political skill of reconciling the contrast- tion as 'a value s u b t r a c t o r . . , a rationale embedded
ing demands of clients, senior management's objec- in American mythology as well as in management
tives and the needs of other organizational players philosophies.' The important implication for senior
outside his hierarchical control is explored. management using project teams is that while
competition from external agents must be recog-
As Rosabeth Moss Kanter '4 has argued, a key nized and addressed, the in-house equivalent is
strategy for a well-established, 'post-entrepreneur- actually more likely to undermine the implemen-
ial' business is the adoption of'newstream projects'. tation of corporate strategy.
She suggests that a tension may occur between such
ventures and the existing 'mainstream'. We found The ideal was found to be something like the 'task
this in our sample companies where resentment culture' described by Handy 17 in which prescribed
from other areas was apparent: 'Project managers roles and procedures are maintained only insofar as
are glorified progress chasers, stealing the glory' corporate objectives are achieved. In particular, the
(engineering manager at Inflight); 'There is an family metaphor was used in both industries: 'The
uneasy balance between the customer's desire for matrix is like a family; you can throw your weight
prompt delivery and high quality, and production around so m u c h . . , personalities are important but
which wants a quiet life' (project manager at their effect is diluted by the size of the project'
Airsupport). (Palmers) ; 'In general, this site tends to be informal-
- l i k e a family--with few procedures (Fleetcraft).
However, this tension was never regarded as As suggested above, however, the necessary climate
intractable perhaps because in a project-orientated of trust and cooperation was not always apparent
organization the separation of routine production with project managers arguing tha~bureaucratic red
and development work from client-centred projects tape and personal inflexibility constantly hindered
is enshrined in the culture. Whether or not a project project goals. In the absence of direct hierarchical
is completely free-standing such as the engineering authority, project managers overcame such resis-
construction task force, there is an explicit recogni- tance through the following means:
tion that each major project must ensure the growth
or even survival of the host organization. Nowhere (a) Appeals to the common (corporate) good. Through-
was this more apparent than at Palmers where a out the project, more mechanistic means of
project manager argued, 'Projects are central to the gaining compliance were avoided in favour of
company--profits come from this source a l o n e . . . an implicit equation of project with company
[all else] is overhead bookable'. goals.
(b) The creation of psychological contracts. Usually at
A review of the chiefly U.S. project management
the outset of a project, its manager would
literature suggested that an element of in-house
identify, with varying degrees of formality,
competition increased subunit effectiveness and led
to the maximum generation of viable alternatives. those responsible for executing the project. In a
Cleland, 15for instance, has argued that peformance- matrix set-up, the vast majority of these people
related individual and team rewards create competi- were outside the project manager's direct
tion and reduce mediocrity. Contrary to this control and, in the defence contractors, they
hypothesis, however, almost all the managers in were often based elsewhere on and sometimes
outside the site. This informal contract would
both the defence and engineering construction
industries strongly refuted the notion that competi- then be reinforced by direct identification of
tion between projects or between projects and named departments/individuals with particular
functions was in the best interests of the whole work packages represented on the planning and
control system.
organization.
(c) Monitoring progress through planning and control
Indeed, interviewees often volunteered negative systems. As the project progressed through its
connotations such as 'rivalry' and 'conflict' as being life cycle, slippage from pre-agreed targets
already endemic in the system and thus requiring relating to time, cost or quality could then be
84 Long Range Planning Vol. 26 February 1993

identified using planning software and, subject People must be made aware of what has to be done
to renegotiation, the deparment/individual . . . Perceived rather than formal status is crucial.' In
could be persuaded to compensate. another engineering construction company, W o o d -
house, one project manager was even more specific:
(d) The threat of revealing non-compliance with project 'Contracts are a prime mover for company turn-
goals (and, therefore, corporate objectives) to senior over. This is a finite figure of about 60-70 per cent
management. Rather more formally than the on m y project.'
appeal to the c o m m o n good, project managers
could use the planning and monitoring process Direct monitoring of virtually every aspect of a
to identify areas of resistance without neces- project could be obtained using computer-based
sarily making a request to senior management planning and control systems. Although the details
for arbitration. Indeed, it was enshrined in the of this methodology are beyond the scope of this
culture of these project-based organizations that paper, it is worth illustrating the basic approach.
progress summaries regularly reached company Figure 3 shows the major elements of project
executives, placing the onus on project control in a Joiner's engineering construction
managers to 'high-light' problems. Obviously, project. This set-up was typical of planning
it was then in the interest of the project manager networks in both industries, allowing detailed data
and those identified as responsible for particular input, manhour analysis and cost control at the
elements of the project to resolve at least overt lower, more detailed levels with summaries for
disagreements without escalation to higher project and departmental managers and overall
authority. summaries at the highest level for client and senior
management reports.
At Eurobuild one manager vividly and persuasively
put the case for the growing influence of the project A senior project manager at Joiners described this as
manager role w h e n he said, 'It's a question of a 'pyramidal cascade', enabling him to concentrate
emphasis--final client answerability. It's not a on setting objectives and reviewing progress mainly
question of life and death or hire and fire power but through bar charts. He was less likely to be
a change in our total project responsibility . . . personally involved with the 2nd level of drawing

Project
Control Level .........
i iii iiiiii
'' .................i ................... t/ll:il~~]';tl N
T I//IlI NI/i! !
ii INii-
=".............
° ' 1............
° _ll!i l
.....................................

@I
iii Iilii
,,,,,0=0,000,
[i ii!ii~iiiii!!iiiiiiiiiiiiiiiii:l
- IiliNiN i
A;-iii!!{MNN~!!
i!!l:~:>,[i:!i![.:i.!.!.!.::::::i~!~!i!~ii!~i:i~iii]-Iiiii! i~:. i!!i!

Figure 3. The major elements of project control

 Implementing Strategy Through Project Management 85

up the schedule of major task and he allowed sub- paper has been somewhat counteracted by a
project managers to deal with the full network of tendency towards takeovers and mergers which
15,000 specific activities at level 3. This enabled have reintroduced direct hierarchical control at the
'reporting by exception' by which more junior expense of a competitive market arrangement. So,
managers could 'point out where others are not for instance, we have seen the GEC group take over
feeding in on the chain of dependency'. Plessey with the approval of the 'Monopolies and
Mergers Commission' so that they can pool
Despite this optimism and the finding that variants resources in a world market. We have also seen the
on this approach were used in all 20 companies, the Dickens group in this paper take over a competitor,
planning systems were often criticized for being Fraser Jones, after running into difficulties with a
inflexible and retrospective. In particular, contribut- few major projects.
ing functions were often slow to input relevant data,
resisting project attempts to control them in this Even with the emergence of larger and larger
way. Furthermore, project managers themselves corporations, we have demonstrated that projects
often had limited computer literacy, arguing that can be used in regulating internal markets, manag-
their personal competence depended on general ing growth and coordinating increasingly multi-
planning and high level negotiation skills. As national cooperative ventures. Whatever the busi-
Kotter TM found in a study of general managers, ness, corporate planners can focus their attention on
information technology is regarded as an important core expertise, using a project-integrated contract-
tool rather than a substitute for the network, of ing approach to add value and share out risk
people within and beyond the project manager's amongst appropriate specialists.
direct sphere of influence who are committed to
project completion.

Conclusions References
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(16) R. Moss Kanter, op. cit.
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