ISSUE CONTEXT AND PROJECT CONTENT: MANAGING EMBEDDEDNESS IN ORGANIZATIONAL DEVELOPMENT PROJECTS

During the last decade, there has been an increasing awareness on the importance of ”embeddedness” as an important dimension in analyzing projects. While traditional project management theory presupposes that projects are clearly defined and separable from the context in which they are implemented, the notion of embeddedness implies that contextual factors affect the project organization throughout the whole project. In the most embedded kind of projects, organizational development projects, most actions are in fact taken with the context in mind rather than the project contents. One way of analyzing embeddedness in project management could be to make use of the insights of strategic issue management theory. The theory propose that the context of upcoming strategic issues in organizations is crucial for the understanding of how these issues are managed. From an analysis of a case study of a management accounting reform in a Swedish county council in terms of (1) the issue context, (2) the organizational context, and (3) the institutional context, project management in embedded projects is discussed. Project management theory can be used to reduce contextual complexity and to make project participants focusing on project contents, but it should be complemented with a strategic issue management approach in order to make use of the complexity and having the project context consciously managed. THE NOTION OF EMBEDDEDNESS IN PROJECT MANAGEMENT One of the fatal mistakes of early organizational theorists such as Taylor, Fayol and others, was to view organizations as closed activity systems that could be designed for optimal effectiveness and maintained with simple managerial practices. The firm was described in terms of a planned activity system, and the manager’s tasks consequently as to plan the activities and to make the employees subject to detailed and unambiguous orders. Subsequent research has verified some of the normative advice of Taylor and Fayol, but has also pointed out that organizations cannot be understood unless their context is understood. Organizations are embedded in a complex societal web of people, resources, institutions, market conditions, and the activities inside them are always affected by the characteristics of that web. After decades of strategic planning, management is increasingly becoming the art of turning the dynamics in the environment into advantages for the organization. In many important ways, traditional Project Management (PM) theory still suffers from the rationalistic dreams of the early 20th century (Buchanan, 1991; Packendorff, 1995). Ever since the early planning models, good PM has always been connected to skillful scheduling and analytic leadership (cf. Avots, 1969). The rise of PM as a distinct discipline in the 1950’s was in fact a consequence of the successful application of new project planning techniques in the U.S. Navy, and that tradition has persisted over the years (Engwall, 1995). The main part of contemporary PM knowledge is therefore concerned with different approaches to project planning and control, usually in a normative fashion (Packendorff, 1995). These models are based upon a perception of the project as a distinct, manageable activity system that, once having been designed using the proper scheduling techniques, can be isolated from the environment and implemented. One example of this thinking is the general systems theory approach as described by Cleland & King (1983). They view the project as a level of analysis under the organizational level, and a project should therefore always be initiated as a result of strategic and tactical decisions in one or more organizations. At best, the project should be a logical consequence of corporate strategy, a means to achieve ends at higher levels in the organizational system. This reasoning is a recognition of the project environment, but it is an environment that provides the project with its goals only. Implementing the goals is the task of the project manager, and once having his project plans approved, he is supposed to deliver the goals following the plan. Another example of the traditional view on the project environment is the research on project life-cycles as reported by Pinto & Prescott (1988, 1990). Using the traditional lifecycle model of the project where conceptualization/planning is separated from implementation, they were surprised to find that ’top management support’ was needed not just only in the planning phase, but also throughout the implementation phase (1990: 318). What their findings suggested was in fact that project organizations had an environment while they existed, not only before and after. In recent literature, the notion of projects as dependent upon their environment throughout their life-cycle has been investigated further. Departing from an alternative view of project environments a number of studies has been made on how environmental factors affect project organizations. Buchanan (1991) points out that political and cultural dimensions of project work need to be taken into account. In a similar vein Borum & Christiansen (1993) suggest that the usual administrative perspective on project implementation has to be complemented by political and network perspectives. By analyzing project implementation in such terms, a better understanding of actions and actors in and around projects could be achieved. The common observations in these two articles are that power structures in the permanent organization must be handled throughout the project, and that all project plans meet a reality consisting of human beings with many different views on how things should be done. Kreiner (1995) makes the same observations, concluding that the external relevance of a project might decrease over time as a result of changes in e.g., customer preferences, competitor strategies or top management commitments. Pinto (1996) argues that ”stakeholder management” is a crucial aspect of project management; different groups of actors around the project have different reasons for participating in and supporting the project, and it is the responsibility of the project manager to keep them supporting and participating. Empirical examples of the consequences of project embeddedness are also to be found. In studies of the construction industry, Ekstedt, Lundin & Wirdenius (1992) and Kadefors (1995) find that strong conceptions on how construction projects should be scheduled resist most managerial efforts aiming for change and renewal. From a case study of a major real estate project, Hellgren & Stjernberg (1995) conclude that such projects are in fact networks a big number of formal organizations involved in power struggles. Similar studies are presented by Sahlin-Andersson (1992), who recommend ambiguous project goals in order to satisfy all stakeholders, and Engwall (1990) who find that reaching internal project goals only does not necessarily makes the project an effective one in the eyes of outsiders. Midler (1995) and Wheelwright & Clark (1992: 124ff) draw on experiences from the automobile industry when they recommend a long initial discussion/design phase in projects. In such a phase, goals and specifications are kept undetermined in order to really achieve a subsequent implementation phase where no one, inside or outside the project, will introduce any new information or propose substantial changes. The common denominator of these observations can be expressed in terms of what Hodgetts (1968) called the project manager’s ”authority gap”, i.e., the gap between the full responsibility for project outcomes and the incomplete authority over the resources needed for reaching those outcomes. One perspective of this gap is concerned with formal authority of the project manager, where embeddedness implies that executives in the surrounding permanent organization reserve the right to put the project manager’s operative decisions in question. This structural restriction has been observed by many scholars; some recent examples are Jessen, 1992: 73f; Larson & Gobeli, 1987; Meredith & Mantel, 1995: 110ff and Midler, 1995. Another perspective consists of an extended view of project effectiveness; if the project manager finds himself in a situation where he has to choose between a scheduled activity and an activity proposed by the customer, he must act so that the customer still find the project to be an effective one. Frame (1994: ch. 5) describes customer orientation as something both project management professionals and their customers must learn, and he states (p. 107) that ”the project management process is a grand exercise in compromise, from defining needs all the way up to writing the final documentation at the conclusion of the project”. A third, and the most important, perspective on the authority gap is the conceptions of the people in the project organization. In embedded projects, most team members have positions in the surrounding permanent structure and they also refer to that structure in terms of social/cultural belonging and career paths. The more embedded the project is, the harder it is to identify the actual borders of the project organization and the harder it is to gain commitment to the project from project members. Project members will act depending on how they perceive the project and what they expect from it, not necessarily according to project plans, effectiveness criteria or formal structure. From a traditional PM point of view, embeddedness is a dysfunction. Projects are supposed to be closed activity systems in order to be possible to manage effectively, and all environmental influences are consequently seen as disturbances that the project manager has to protect his organization from. There is only one reality (i.e., the one of the project manager), and differences in how people inside or outside the project perceive it must be brought to convergence. Another way of handling embeddeness