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The last several years have witnessed a growing scholarly interest in project-based organizations. This interest mirrors the diffusion of this organizational form across a wide range of industries, well beyond those where organizations traditionally have been organized by projects. To date, however, research on project-based organizations has not yet offered a systematic investigation of the interactions between project-based organizing and strategic management research. An examination of the existing literature indicates that some of the answers to key strategy questions remain incomplete, at times contradictory, and at best ambiguous. This volume moves the discussion to the next level by offering a comprehensive yet integrated view of cutting-edge research on project-based organizing to shed light on some of these ambiguities and clarify the relationship between project-based organizing and strategic management. To accomplish this, the volume includes the contributions of several leading scholars who have been active researchers on this subject. The chapters develop and extend key strategic aspects of project-based organizing, raise many new important questions, and identify fruitful areas for future research.

Project-based organization (PBO) can serve as a temporary organizational form in response to uncertainty or turbulent environmental conditions. An updated retrospective study of the Danish hearing aids maker Oticon illustrates the role of PBO (the so-called spaghetti organization) in guiding the company through a specific period of industry turbulence and the company leader's search for a more effective structure to organize innovation within the company. The spaghetti organization was experimental in two distinct senses. First, the spaghetti organization tested the limits of decentralization, bottom-up self-organizing innovation, and PBO. Inspired by the experience of just how dysfunctional hierarchy could become, Oticon's spaghetti organization tested the limits of nonhierarchy. And unlike the failed Brook Farm utopia of the 1840s, the utopia of radical project-based organizing at Oticon proved highly successful as a means of promoting innovation even if the spaghetti organization was not sustainable in its original form and required subsequent modification. Second, Oticon was essentially a natural experiment testing and refuting the complementarities-based claim that intermediate forms of organization which include elements of both hierarchical organization and team (or project-based) organization are inherently unstable.

This chapter proposes an institutional framework for analysis of strategy in project-based organizations. The chapter argues that an analysis of the strategy of project-based organizations must take into account the interaction between deliberate and emergent strategic processes in this type of organizations. The chapter then goes on to argue that achieving this goal depends on addressing the ‘multicontextuality’ of project-based organizations – the fact that deliberate strategic processes respond to external environment, while emergent strategic processes are rooted in the organization's project portfolio. Based on this analysis, the chapter advances an institutional framework for analyzing project-based organizations which couples the institutional logic of the external environment, with the institutional logic which emerges from the internal ‘project field’. To explore this framework the chapter analyzes the emergence of the central-producer system in the Hollywood motion picture industry during the first quarter of the 20th century, and the role that Irving Thalberg played in creating this system.

In this chapter we put projects at the centre stage of firms' activities – i.e. product and process innovation, strategy formulation and implementation, capability building and learning, organizational structure and design, and systems integration (the capability to combine diverse knowledge bases and physical components into functioning systems). Based on the findings of a 10-year research programme into firms producing high-value capital goods – known as complex products and systems (CoPS) – we draw out conceptual insights about project organizing that can inform and contribute to the development and reformulation of more universally applicable formal theories of strategic management and organization.

This chapter develops a conceptual framework to help us position and understand the increasing importance of project-based innovation for industrial organization in the 21st century. It builds on and extends Joan Woodward's (1958 and 1965) pioneering research, which classifies industrial organizations according to the complexity of production technology and volume of output. We suggest that a radical revision of Woodward's framework is required to account for the extensive use of project-based organizations to gain competitive advantage through accelerated innovation and growth in new technologies and markets.

This chapter examines key drivers of variation in adaptive capacity of project network organizations (PNOs). PNOs are defined as strategically coordinated sets of longer-term, yet project-based relationships, which provide for both stability and change in volatile project businesses. While prior research has emphasized the adaptive role of flexible structures and agency, the author focuses on the role of project variety and contextual embedding and disembedding in building adaptive capacity. Comparing two PNOs in TV movie production, the author argues that differences in adaptive capacity are a function of inter-context connectivity, that is, the level of task and team linkages among diverse project contexts, and the degree to which network ties and relational practices have “dual quality” in being valuable both within and beyond specific project contexts. Findings have important implications for project, network, and organization research.

This study examines the variety of cooperative strategies used to organize the international co-production of motion pictures. Motion picture production is a high-goal singularity, project-based industry in which the structure of relationships between companies involved in cooperative strategies is highly visible. Working from existing theories of co-production and drawing on the strategic joint ventures literature, I examine archival data, first for evidence of the strategies predicted by theory, and then for project participation strategies that theory does not account for. I identify four strategies on the basis of the ways that firms participate in international co-productions. A large number of relatively short-lived firms enact strategies of supplying resources and skills to the persistent firms dominate the industry. Two types of persistent firms cooperate with both direct competitors and complementors but pursue different markets, whereas a third type avoids cooperation with peers. The observed strategies constitute a hierarchy of strategic roles, and thus demonstrate the complexity of strategic behavior involved in project-based production.

There has been a growing interest in the field of strategic management to understand the relationship between the organizational capabilities of firms and (a) the direction of strategies pursued and (b) the impact on competitive performance. Much of this literature has been influenced by the resource-based view of the firm. As indicated in early formulations of this theory, one implication is that the organization of resources is equally important as the resources themselves. Accordingly, the organizational and integration of resources and knowledge can be viewed as a core facet of the organizational capabilities of firms that are difficult to imitate for competitors. This paper explores a particular kind of organization referred to as the “P-form corporation” (Project-Form), its organizational capabilities and options for strategic alternatives. The chapter addresses three broad questions: (1) What are the main characteristics of P-form corporations? (2) What are the capabilities acquired and developed by P-form corporations and how are these acquired? (3) How do these capabilities vary across different strategic alternatives in the P-form corporation? The chapter concludes with a discussion about the implications for strategy and management.

This chapter clarifies our understanding of the project-based firm (PBF) by sharpening the theoretical foundations of project capabilities. It emphasizes the differences between project capabilities that eliminate variance in project outcomes (to control costs and add value) and economies of scale that reduce costs across multiple projects. It also highlights how the different ways in which value is captured by project-based organizations can feedback to influence how these capabilities and scale economies are generated. This opens up new typologies of project-based organizations, with implications for theory and practice.