Corporate Governance & Portfolio Governance

Get Complete Project Material File(s) Now! »


This chapter gives the reader a description of the study, discusses the research philosophy connected to the purpose of the thesis and elaborates on the research strategy and methods that were chosen to conduct the study.


First it is our intention to describe the origins of this two-fold study in order to provide the reader with a better understanding on how the topic of this thesis has evolved. The idea for the study came as a result of a previous study on PPM that was carried out in the fall semester of 2008. The study was conducted in cooperation of JIBS and Capgemini® and its goal was to better understand the challenges and milestones of projectbased organizations. 48 companies were studied through an online standardized survey that consisted of 54 questions. While there were numerous interesting findings, one of the results confirmed an assumption that the researchers had prior to the study, namely that companies still implement projects, programs and project portfolios unsuccessfully. The reasons for that result are various, including imperfect processes, and decision-making rationale. One aspect, which was particularly striking was the lack of a standardized framework to guide companies prior to portfolio decision-making meetings. The distinction between project management and project portfolio management will be elaborated on more in Section 3.1. What must be noted is that project management has been well developed in the last 60 years but the management of a project-based firm is a quite novel research field, with project portfolio management within it even more novel (Artto & Kujala, 2008; Killen et al., 2008). There are numerous tools, volumes of literature and countless advice journals on project management, but project portfolio management has only recently, perhaps in the last 10 years or so, become of interest to academics. It is for that reason that much of the issues and specifics pertaining to PPM have not yet been well developed. This presents both a challenge to the researcher but also an opportunity to further contribute with academic work to theoretically advance the field. This led us to seize the opportunity to contribute with a project portfolio governance framework that we believe is much needed in current PPM practices. When beginning our research, we approached the field without any preconceptions as to the reasons for this lack. We collected the relevant information from the library of the University of Jönköping, from databases such as ABI/Inform, Academic Search Elite, Emerald and Science direct, searched the Internet for related published books, and read the websites of the major project management institutes, among others. Also, through personal communication with the vice-president of Capgemini Jonas Winqvist as part of the previous PPM study, we acquired additional insights on the subject. While examining the literature on project portfolio management, we were not sure what we were looking for specifically and were not able to pinpoint the focus/purpose of our thesis yet. An aspect that was repeatedly stated to be crucial for successfully performing portfolios was the need for strategic alignment of the portfolio towards the organization’s objectives. This leads to the questions on how strategic alignment can be measured and assured in the long run. The concept of PPM maturity of an organization is discussed in detail in our theoretical background part. In essence, PPM maturity in organizations refers to how well organizations implement project portfolios and project portfolio management. Several maturity models have been developed to assist organizations in this endeavor, and the maturity models tend to be quite similar in the criteria they use to measure maturity. It was one such study, carried out by the consultancy PM Solutions in 2005 and was based on their own maturity model (‘PPMMM’, Appendix 1.3) that drew our attention. It measured maturity of companies implementing project portfolios, from a number of perspectives. The most important finding from that study was that organizations scored lowest or second lowest on portfolio governance, out of all 5 perspectives (PM Solutions, 2005). However, while there are numerous tools, techniques and advice on how to improve the other 4 areas in order to reach a higher maturity level (both on the market as software, and in the different books as guidelines), nothing substantial existed for companies to follow, in order to increase their portfolio governance maturity. It is for this reason that we decided to look into portfolio governance into more detail. And reviewing existing studies on PPM maturity revealed to us that portfolio governance is a dimension of portfolio management that is clearly underdeveloped. We saw this as one of the main weaknesses of the current literature and formulated our problem discussion on it. Further reviews of PPM literature revealed that a portfolio governance framework has not been developed yet. Therefore, we believe a framework like this is necessary to ensure the consistency of the decision-making rationale at portfolio meetings, which sets the basis for mature PPM practices. And identifying this gap in the literature served as a foundation of the purpose of this study and for the here proposed Portfolio Governance Framework. Besides proposing the said framework to fill this gap, we also saw the need to examine whether companies consistently use similar guidelines that bring awareness to underlying portfolio sections. Thus, in order to do both of our research statements in the purpose justice, it was found necessary to include an empirical investigation in this study. In other words it has been our aim to test the proposed guidelines (consistent usage of portfolio governance rationale for decision-making) vs. the actual or completely ad hoc practices in project-led organizations. And because we are only aiming at finding out whether organizations use such a tool or not, we decided that using a standardized set of questions, aiming at the consistency of the issues taken up during portfolio decisions, is what we need to know in order to reach a conclusion. Should we find out that there really is no such framework, then we suggest that companies either use ours or develop their own, in order to make decision-making more valid and consistent. Should there be such a framework on average, then we suggest that companies use our framework to identify the areas, which they deploy least often, in order to reach a higher state of validity and consistency. We believe, as is widely accepted among theoreticians and practitioners who test the maturity of project-led organizations, that consistency and standardized approaches are a vital part of implementing project portfolio more successfully.

Research Philosophy

When it comes to what constitutes acceptable knowledge (Saunders, Lewis & Thornhill, 2007) for the purpose of this study it is not easy to take a pure stand, but it is necessary in order to be guided by certain approaches, methods and tools. The reasons for that are numerous but perhaps the most important is the multifaceted nature of the current study. While on one hand it is derived from a gap in literature, on the other the proposed framework is built on what authors see as important most commonly. Therefore, it may be said that the current thesis can be separated into two distinct studies – one based on literature review to identify a gap and suggest a framework to fill it. This represents our theory-building part. And the other – an empirical study to test the employment of PPM governance frameworks in project-based organizations. It is believed that the practices of the surveyed companies would be much facilitated if they employ a governance framework to guide their portfolio processes. We propose one such framework. Still, because of the way we approached the issue of the current thesis, we can say that our study leans toward positivism more than any other paradigm. Furthermore, it is important to mention that project portfolio management (PPM) and PPM maturity are rather new areas of research from an academic perspective. Because of that, much of the literature that has been used for deriving our Governance Framework is based on literature written by practitioners with long experience in the field. Hence, it can be argued that the literature review carried out in the first part of the study is theoretical but is based on empirical findings. The epistemological perspective taken in the study is that of positivism because positivism is associated with the observable social reality, concerned with facts rather than impressions (Remenyi, Williams, Money & Swartz, 1998, cited in Saunders et al., 2007). In terms of the first part of the study, the current literature on project portfolio management, strategic alignment and organizational government was reviewed in order to formulate assumptions that were based on an identified gap in the literature. As pointed out above, since the literature on PPM is rather new and since the majority is based either on practitioners’ experience or empirical studies, the gap in it was identified when reviewing existing maturity models for PPM. The positivist stance of this theory allowed us to examine the literature with the goal to pinpoint an area that we could contribute towards. It must be noted that we started off with an assumption that since PPM maturity was a rather new area of research, gaps existed in it. Insofar as positivism is supposed to be carried out in a value-free-way (Saunders et al., 2007), this still holds true for the study. As Punch (1998, p. 51) points out, ‘the researcher has a value judgment at the start of the research (when the selection of the research area and research questions is made)’ which is the stance we retain before beginning the study. As will be discussed below, in section 2.4, the mixed method model will allow us to deploy qualitative interpretation of the findings from the quantitative study. However, in terms of conducting the study itself, in between the beginning and the end the idea is to carry out the research in a value-free way (Punch, 1998) in order to allow for law-like generalisations (Saunders et al., 2007). Since the research is conducted in the sphere of management, we believe that ‘only phenomena that you can observe will lead to the production of credible data’ (Saunders et al., 2007, p. 112). While in many areas the feelings of the researcher may play a role in evaluating the data, it is our goal to conduct this study from a positivist perspective because we are not concerned with why managers take or do not take certain decisions at portfolio meetings but rather whether they take decisions pertaining to specific areas of project portfolio management. It can be said that for this study there not much can be done to change the content of the data collected (Saunders et al., 2007) and we can only assume what the reasons could be for these decisions. We are more interested in what those decisions are, as a sum, in order to be able to evaluate whether project-based organizations employ governance frameworks at portfolio meetings. As such, for the empirical part of the study, we will implement ‘a highly structured methodology in order to facilitate replication’ (Gill & Johnson, 2002, cited in Saunders et al., 2007, p. 118) should any researchers in the future wish to expand the study to include companies from countries, other than Sweden, or to companies in Sweden that do not have specified PPM practices. Insofar as the current study is concerned, it checks whether the surveyed companies employ governance frameworks for the decision making process at their portfolio meetings. In other words, since we cannot study the thing itself but only the way it appears (Walliman, 2001), confirming the use of governance frameworks in order to better understand decisionmaking at portfolio meetings is a positivist approach. However, as the goal of the study is also to collect information about ongoing portfolio meeting practices, the information that is deemed necessary to confirm or overthrow the existence of governance frameworks can be said to aim at figuring out which social structures have caused to the occurrence that we are trying to understand (Saunders et al., 2007), i.e. critical realism. Furthermore, the critical realist perspective is even stronger in that the information that we consider relevant to our study is to be derived at multiple levels – the portfolio, the strategy and the board perspectives. This is contrary to the belief of direct realism that the world is unchangeable (Saunders et al., 2007), because the underlying assumption for the decision-making body is that changes are made on a regular basis to reflect the changes in the external environment (i.e. the portfolio objectives have to be aligned with the organizational strategy, which changes when the environment drives it to). We may be tempted to approach the study from a critical realism perspective, because we may not want to lose ‘rich insights into this complex world … if such complexity is reduced entirely to a series of law-like generalisations’ (Saunders et al., 2007, p. 105). However, it is only in the beginning and the end of the study that we need to evaluate information in order to carry out the research, and the study itself will be approached from a positivist, value-free, stance. As implied, the challenge for the positivist paradigm is that of reducing complex data to generalizations. But it is the purpose of this study to confirm or overthrow the usage of portfolio governance frameworks in organizations, and not to evaluate the methods or tools used instead of such frameworks. Whether the results could be generalized to be true to all companies that fit our survey sample criteria, is rather ambiguous, but in this study we can evaluate or check for a tendency in companies to do so, thus making the results of the survey transferrable to other companies, operating in Sweden, that deploy PPM practices. Therefore, we deem this challenge as an irrelevant obstacle in our thesis.

READ  Large deviations for heterogeneous neural networks

1. Introduction
1.1 Problem Discussion
1.2 Purpose
1.3  Delimitation
1.4  Definitions
1.5  Outline of the Thesis
2. Methodology
2.1  Description
2.2  Research Philosophy
2.3  Research Design
2.4  Research Method
2.5  Validity, Reliability & Generalisability
3. Background & Literature Review
3.1  Project, Program, Portfolio – the Essentials
3.2  Aligning Strategy and PPM
3.3  PPM Maturity
3.4  Corporate Governance & Portfolio Governance
4. Frame of Reference
4.1  A Portfolio Governance Framework
4.2  Discussion of the Three Framework Parts
4.3  Contribution to the PPM Body of Knowledge
5. Empirical Findings & Analysis
5.1  Presentation of the General Findings
5.2  Analysis of the Survey Results and Discussion

Related Posts