Towards systematic improvement work in project-based organizations : An efficiency and effectiveness perspective

Abstract: Project-based organizations (PBOs) have adopted projects as a primary tool for carrying out most of their operations. By doing so, the PBO operates mainly on two organizational levels, the project level and the organizational level. For these organizations, improving project management (PM) performance is central for the survival of the organization, since PM is considered both a strategic competence and a source of competitive advantage for delivering customer value. For PBOs, prioritizing efficiency has often been described as a short-term focus meeting time and budget targets. The need to shift focus toward value creation in PM is suggested to be of importance to succeed in delivering value to customers. Project performance, and the separate but interlinked concept of project success, can be described using the two concepts of efficiency—doing things right—and effectiveness—doing the right things. However, although commonly used within the field of quality management, the application of these two concepts in the PM literature and practice has proven to be unclear which has implications on organizational improvement.It is through the two concepts, efficiency and effectiveness, that systematic improvement work in PBOs can be understood. This thesis addresses the need for influences from other research fields, by approaching improvement work in PBOs from a quality management perspective. More specifically, the purpose is to advance our understanding of how PBOs can work systematically toward improvements, from an efficiency and effectiveness perspective. This is done by exploring challenges related to improvement work in a PBO operating as a subsidiary to the Swedish minerals group LKAB. In order to do this case study research has been used, including a combination of data collection methods: including semi-structured interviews, participant observations, and document analysis. Case study findings have continually been compared to theory in order to reach conclusions.The findings indicate that an organizational-level improvement process is missing, and that PBOs need to link such a process to project-level processes, in order to work toward improvements. Applying an efficiency and effectiveness perspective further clarifies the division of practice and responsibility between PBO and the client. Further, it is suggested that the role of the project manager as an improvement agent in PBOs should be formalized and clarified, in order to support learning and organizational-level improvement. Finally, the need to clarify and manage what constitutes value and value creation among stakeholders in projects is emphasized, in order to support both efficiency and effectiveness in project work.The thesis contributes to the literature by discussing the prerequisites for PBOs to work toward improvements, and by approaching project management from a quality management perspective. From a managerial perspective the thesis emphasizes the importance of clarifying responsibilities regarding project value creation, as current practice seem to promote a separation of responsibility, in which the PBO is responsible for aspects of efficiency, and the customer is responsible for aspects of effectiveness.