Organizational tensions when managing interorganizational projects : Applying a paradox perspective on large construction projects in Sweden

Abstract: Over the years, technological developments and societal changes have forced companies to modify their organizing practices. Companies operating in the construction sector are no exception, but due to their project-based structure, it is more difficult to coordinate change initiatives. Indeed, the construction sector is often described as conservative and unwilling to adopt change. However, there is a growing interest and ambition within the construction sector to develop and implement new ways of working. In addition, the need to adapt organizing practices of large construction projects due to societal changes is particularly strong because large construction projects are very dependent on a wide range of societal stakeholders.Changes in organizing practices as well as contextual changes often create new and intensify existing organizational tensions. Because most large construction projects span organizations, tensions can emerge and develop at several organizational interfaces. For instance, tensions related to control and flexibility can emerge between the client and the contractor, within each of these parties, but also between the project organization and societal stakeholders. Another type of tension relevant to construction projects is between the exploitation of current knowledge to perform efficiently today and the exploration of new knowledge in order to innovate for tomorrow’s demands. The abovementioned tensions have a paradoxical nature, meaning that although both elements in the tension make sense, they appear to be impossible to combine. Yet, applying a paradox perspective on organizational tensions recognizes that both elements are required when organizing. Moreover, prior research has shown that due to interdependencies between different organizing activities, responses to tensions may evolve into reinforcing cycles, substantially impacting performance. Therefore, the aim of this thesis is to create an improved understanding of the dependencies between tensions at different organizational interfaces in large construction projects by applying a paradox perspective. Empirical material was drawn from a qualitative study of seven large construction projects in Sweden, including three rounds of interviews during a four-year period, site visits, and reading of project documentation. All projects had an original contract sum of at least 50 million Euros and durations over several years; they included both transport infrastructure and building projects. An initial analysis of changes that project managers in large construction projects perceived in their role due to changing external and internal conditions provided a better understanding of the origin and nature of tensions in contemporary large construction projects, resulting in Paper I. Moreover, specific questions on the subject of exploration/exploitation during the first round of interviews provided input to Papers II and III. The two concluding rounds of interviews focused on dependencies between the tensions related to control/flexibility at different organizational interfaces and, analyzed using a paradox perspective, resulted in Papers IV and V. This thesis contributes to the construction management literature by showing that despite institutional barriers, substantial changes in the organizing practices of large construction projects have occurred over the years. However, the statements and attitudes exhibited by several interviewees indicate that the construction sector’s reputation for being conservative has become institutionalized, blocking creativity and favoring exploitation over exploration. This thesis also contributes to the literature on managing large construction projects by showing that distinguishing between interorganizational and intraorganizational aspects is essential to achieving a better understanding of the dependencies between organizing activities. For instance, analyses using a systemic paradox perspective showed that tensions related to control/flexibility coexist at both interorganizational and intraorganizational interfaces and that there are interdependencies between the two tensions, resulting in reinforcing cycles. For example, urges from client governance to their project manager to increase control of the contractor translated into an increase of control over the contractor project manager by his/her governance forum in order to retain the contractor’s flexibility. This triggered further controls by the client, and so on, in a vicious cycle of control. Similarly, this thesis demonstrates that in order to better understand how exploration and exploitation in large construction projects is dependent on intraorganizational strategies and decisions, it is fruitful to apply a systemic paradox perspective and simultaneously analyze both intraorganizational and interorganizational aspects.In addition, this thesis contributes to the literature on paradoxical tensions by identifying tensions and reinforcing cycles simultaneously nested across both inter- and intraorganizational interfaces, thus further calling for a systemic view of paradoxical tensions.For practitioners it is therefore essential to reflect not only which project managers to appoint in large construction projects, but also simultaneously thoughtfully chose members of each governance forum to avoid vicious cycles to occur.