Project portfolio management: A dynamic capability and strategic asset
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- Cambridge Handbook of Organizational Project Management, 2017, pp. 55 - 70
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© Cambridge University Press 2017. Introduction The previous chapters of this book have initiated the discussion on strategy and organizational project management (OPM), outlining the strategic perspectives and foundations underlying organizations and OPM and introducing the resource-based view (RBV) of strategy and competitive advantage. In this chapter, we introduce the concept of dynamic capabilities (DC) and explore how the DC perspective extends the RBV perspective on strategy and competitive advantage; in particular, its relevance to OPM. We outline the scholarly debates on the definitions of DCs, methods to study and measure DCs, and highlight the research that relates DCs to project and portfolio management in the context of OPM. OPM is defined as “the integration of all project management-related activities throughout the organizational hierarchy or network … It is implemented by managers involved in project activities through organizational and managerial means, and governed by the agency responsible for governing the organization” (Drouin et al., 2016, pp. 3–4). OPM takes a holistic perspective on an organization's projects and its project-related network of strategic and collaborative initiatives that are governed and supported at the organizational level. In the OPM context, we highlight the role of project portfolio management (PPM) and its contribution to the development of sustainable competitive advantage by acting as a DC. We show how the OPM perspective helps to explain the mechanisms through which a DC such as PPM can influence the evolution of a wide range of project management (PM) activities and enable response to change. We propose that the resulting competitive advantage can be sustainable provided that the PPM capability is truly a DC and that the OPM approaches enable reconfiguration and change in resourcing and activities. All in all, PPM provides competitive advantage by acting as a DC by dynamically adjusting the organization's portfolio of projects and reconfiguring resources to respond to changes in the environment (Killen et al., 2007). As a strategic asset for OPM, PPM acts as a DC by ensuring the strategic alignment of the project portfolio and the efficient use of PM resources, as well by overseeing the changes required to sustain competitive advantage. Much attention has been paid to competitive positioning as a source of competitive advantage (Porter, 2011), where differences in competitive success are explained by differing strategic choices.
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