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Project Management Knowledge Flows in Networks of Project Managers and Project Management Offices: A Case Study in the Pharmaceutical Industry Ralf Müller, Department of Leadership and Organizational Behaviour, BI Norwegian Business School, Oslo, Norway Johannes Glückler, University of Heidelberg, Heidelberg, Germany Monique Aubry, School of Business and Management, Department of Business and Technology, Université du Québec a` Montreal, Québec, Canada Jingting Shao, Institute for Industrial Economics, Chinese Academy of Social Sciences, Beijing, China

ABSTRACT ■ This study investigates the knowledge flows among and between project managers and project management office (PMO) members in a pharmaceutical R&D company in China, using a mixed-methods approach. The results show that knowledge exchange happens in clusters, where each cluster forms around a PMO member. Contrary to expectations, PMO members were not identified as the most popular knowledge providers in these clusters; instead, knowledge was requested from earlier collaborators. A three-tiered model is developed for knowledge governance at the cluster level, across clusters and the link with corporate and project governance structures. Managerial and theoretical implications are discussed. KEYWORDS: knowledge governance; project management office; network of PMOs; mixedmethod approach; social network analysis

Project Management Journal, Vol. 44, No. 2, 4–19 © 2013 by the Project Management Institute Published online in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/pmj.21326

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INTRODUCTION ■ oday’s economic situation (not to say economic crisis) has a flavor of profound universal uncertainty. For organizations, this translates into high levels of pressure for strategy implementation to deliver expected benefits from investments (Biedenbach & Söderholm, 2008). This situation also exerts pressure on the management of projects as being part of the dynamic duality of strategizing and organizing (Whittington & Melin, 2003) for doing the right projects done right (Dinsmore & Cooke-Davies, 2006). Innovative forms of organizing include project forms of organizing (Pettigrew & Massini, 2003), taking advantage of a wide variety of matrix arrangements (e.g., Hobday, 2000). Since the 1960s, structural designs have often included project management offices (PMOs) dedicated to a variety of tasks related to the organizational management of projects (Dai & Wells, 2004). Since then, research has provided good conceptualizations of PMOs (Artto, Kulvik, Poskela, & Turkulainen, 2011; Aubry, Hobbs, Müller, & Blomquist, 2011; Hobbs & Aubry, 2010; Hurt & Thomas, 2009; Pellegrinelli & Garagna, 2009). Recent years show trends to establish multiple PMOs in organizations. These PMOs are often organized as networks or hierarchies, each having a distinct mandate, function, and authority in the organization, with the aim of supporting the accomplishment of organizational results at various levels of the organizational hierarchy—in other words, improved project, program, and portfolio management practices (Aubry, Müller, & Glückler, 2011). One of the key tasks of these networked PMOs is the management of project management–related knowledge—that is, establishing the means and ends for project managers and PMO members to share and access knowledge when needed (Aubry, Müller, & Glückler, 2011). This provides for higher competitiveness and organizational efficiency through the reuse of good practices, support of innovative practice, and prevention from reinventing the

T

April 2013 ■ Project Management Journal ■ DOI: 10.1002/pmj

wheel (Glückler, 2008, 2011). However, the practices by project managers and PMO team members in mutually sharing and accessing their knowledge are largely unknown. This phenomenon was investigated as part of a larger PMIfunded study on the governance of PMO networks. This article summarizes and reports this particular part of the study in order to make the results accessible to a wider audience. The management of knowledge management is addressed through knowledge governance, which is defined in this study as choosing organizational structures and mechanisms that can influence the processes of using, sharing, integrating, and creating knowledge in preferred directions and toward preferred levels (Foss, Husted, & Michailova, 2010, pp. 456, 470). A review of the literature on knowledge governance by these three authors showed a wide variety in knowledge sharing mechanisms, but only very little of them being explored in the literature. This issue is especially of relevance for the project-driven parts of an organization, because projects are temporary organizations (Lundin & Söderholm, 1995; Turner & Müller, 2003) and the knowledge gained through projects evaporates after disbanding the project team. Organizations using projects, both internal and external to their organization, have to be concerned about knowledge sharing in order to maintain their competitiveness in the market and their institutional efficiency. Related studies in the realm of project management have investigated knowledge management from many dimensions. For example, project-level studies have explored the transfer of knowledge within projects (Reich, Gemino, & Sauer, 2008), and across projects, (Reich, 2007; Williams, 2007), social practices (Bresnen, Edelman, Newell, Scarbrough, & Swan, 2003; Sense & Badham, 2008), and quality management (Kotnour, 2000). Organizational-level studies either provided overviews on knowledge management, organizational learning and learning

organization (Bredillet, 2004; Walker & Christenson, 2005), and channelization of knowledge (Maqsood, Finegan, & Walker, 2003) or addressed particular issues, such as human resource management (Bellini & Canonico, 2008; Keegan & Turner, 2001), motivation for knowledge management (Szymczak & Walker, 2003), or nonfinancial capital (Arthur, DeFillippi, & Jones, 2001). More integrative studies looked at the subject of knowledge management across the hierarchies of organizations or the layers of organizational networks, including the knowledge culture (Walker & Christenson, 2005) and the Community of Practices (Aubry, Müller, & Gückler, 2011). Others looked into the role of the PMO in knowledge management (Pemsel & Wiewiora, 2013), or the role of knowledge management offices (KMOs) (Shobha & Potta, 2010), up to the convergence of project management and knowledge management (Srikantaiah, Koenig, & Hawamdeh, 2010). Yet another perspective was taken by researchers who looked at knowledge sharing between industries (Fernie, Green, Weller, & Newcombe, 2003), and others examined the methods and techniques to capture and validate relevant knowledge in projects (Abril & Müller, 2009; Andersson & Müller, 2007). This article contributes to the discussion by analyzing the informal knowledge exchange among and between project managers and members of PMO networks and identifies the antecedents for knowledge exchange, preferred communication contacts, clustering of information exchanges, and the extent of information sharing. To this end, this article does not investigate formal and/or established knowledge management routines of a general nature like the studies mentioned in the previous paragraph. This article provides insights into one very narrow aspect of knowledge exchange, which is the preferred informal interaction among project managers and PMO practitioners for accessing project management– related knowledge that is not available

in databases or other knowledge repositories. PMOs and PMO networks are governance institutions for projects and project management with a wide variety of roles, mandates, or locations (Aubry, Hobbs, Müller, & Blomquist, 2011). Together with other project governance entities, such as steering committees, program management, and portfolio management, PMOs form an organization-wide project management approach, known as a new sphere of management where dynamic structures in the firm are articulated as a means to implement corporate objectives through projects in order to maximize value (Aubry, Hobbs, & Thuillier, 2007, p. 332). A variety of studies has investigated the different mandates and roles of PMOs and their members, but little commonality was found across organizations. The most frequently found commonality was that of constant change. PMO’s mandates, roles, authorities, and responsibilities change frequently in order to tackle the everchanging project-related issues in organizations (Aubry, Hobbs, Müller, & Blomquist, 2011). The number of PMOs in organizations simultaneously increases through a move from a single PMO to PMO networks and hierarchies. These networks and hierarchies address project-related issues at the various levels of organizations and in different business units (Aubry, Hobbs, Müller, & Blomquist, 2011). The collaboration between these PMOs requires knowledge exchange among the PMOs, but also with the practicing project managers in the organization. These project managers are working on projects that are temporary in nature, and knowledge from finished projects may be difficult to access because either the project information has not been recorded or shared, or there is no way to access the people who have moved on to work on something else. How do practitioners address this problem in daily work?

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A Case Study in the Pharmaceutical Industry Taken together, the need for knowledge exchange among PMOs in a network and the temporary nature of projects poses an issue for the governance of knowledge between, as well as among, the PMOs and the project managers. To develop relevant knowledge governance mechanisms that can define and steer the knowledge flows in organizational settings, it is necessary to understand the applied practices by practitioners. Once these practices are known, related governance mechanisms can be put in place. Taking current practices into account when designing knowledge governance structures increases the chances of having these structures accepted by project managers and PMO members. This raises the research question: What are the knowledge exchange practices among and between the PMO and the project managers in their particular projects?

To answer this question, the dyadic communication link among and between project management practitioners and members of PMO networks was chosen as the unit of analysis. A holistic case study using a mixedmethods approach was chosen to investigate and understand the knowledge exchange mechanisms in detail. The case chosen was a pharmaceutical company with 90 project managers and five PMOs. Ten interviews were initially held to develop a relevant assessment tool (questionnaire), which was administered to the project management community. Social network analysis (SNA) was used to identify the knowledge exchange practices within this group of practicing project managers and PMO members. This article continues by reviewing the relevant literature of multiple-PMO structures and knowledge governance. Then the case company is presented and the methodology developed. This is followed by the results of the SNA and their discussions. The article finishes with the conclusions of the study and 6

the theoretical and managerial implications for knowledge governance in PMO networks.

Literature Review This section reviews related literature on PMO network structures, the governance of multiple PMOs and knowledge governance, and three major themes to understand the knowledge exchange practices among and between PMOs and project managers. PMO Network Structures Island Structures of PMOs Islands of knowledge are frequently found in organizations, for example, in the form of a single PMO. Hagström, Sölvell, and Hedlund (1999) suggested a model of knowledge structure based upon islands of knowledge. Here islands combine and recombine organically by forming archipelagos of knowledge. The model structure is relatively horizontal, flat, temporary, and circular. Glückler (2011) used the concept of islands of expertise in technology service firms, which link up to foster knowledge transfer between internationally distributed centers. This indicates that islands of knowledge do not pose a problem per se, as long as they are interlinked with each other. If that is not the case, the contribution to knowledge management and innovation is limited. However, islands might be a good structural choice depending on strategy and context, but connecting these islands will enhance knowledge transfer. Network Structures of PMOs In networked PMOs, the focus turns toward connectivity and exchange between the PMOs. Here it is assumed that PMOs engage in a variety of relationships with one another to distribute and coordinate tasks, transfer resources, and generate synergies through joint learning and innovation. Network theory suggests that different types of relationships contribute differently to knowledge management within a network. A comprehensive review of the

April 2013 ■ Project Management Journal ■ DOI: 10.1002/pmj

literature on network theory is outside the scope of this article. The present study on knowledge flows in multiple PMO organizations takes the perspective of networks as structures of relationships. PMOs are the nodes of the network. PMOs maintain transactional relations among each other and with the project managers. If networks are looked at as sets of relationships, they are interpreted as both consequences of individual agency and as social categories, thereby including identity or social opportunities for strategic and collective action (e.g., Burt, 1992; Nohria, 1992). Network theory aims for explanation of social and economic opportunities and benefits of network structures (Granovetter, 2005). Here social network analysis is often used to describe the structural characteristics of networks in terms of their connectivity, density, centralization, fragmentation, center-periphery patterns, and so on (Kilduff & Tsai, 2003). Apart from theorizing the morphology of the network, the social situations and opportunities that actors enjoy within a network are also analyzed at the level of individual positions (e.g., gatekeepers, brokers, clique members, fringe actors) and structural roles. Social Network Structures Jones, Hesterly, and Borgatti (1997) defined the social mechanisms that resolve exchange problems of adaptation, coordination, and safeguarding in intra-network exchanges. They identified four conditions that collectively define the level of structural embeddedness of transactions (such as knowledge exchange) in networks, which then enables four social mechanisms for coordinating and safeguarding exchanges in networks. Hereby a particular combination of the four conditions of demand uncertainty with stable supply (i.e., unknown demand for knowledge), highly customized exchanges from experts, complex tasks under time pressure, and frequent exchanges

among parties defines the level of structural embeddedness. High embeddedness implies a larger number of connections that actors have within the network and the freedom to use them as needed. This embeddedness enables social exchange mechanisms. In network settings, these social exchange mechanisms replace the traditional governance mechanisms of authority, bureaucratic rules, standardization, or legal recourse. That leads to reducing coordination costs and safeguarding exchanges (Jones et al., 1997). Provan and Kenis (2008) distinguished networks from other organizational structures by defining networks as being composed of autonomous entities while simultaneously being goal-directed, and therefore as “essentially cooperative endeavors” (p. 231). Hierarchical Structures of PMOs Hierarchical structures are typically built on dyadic relationships in relatively formal and bureaucratic settings, and thus are contrary to network structures, which imply more than two actors in complex patterns of interdependencies, typically based on organic and social relationships (Rank, Robins, & Pattison, 2010). Hierarchical structures, compared with network structures, allow for more control over the members. They tend to be more bureaucratic, often referred to as mechanistic structures, which are generally less flexible than organic structures (Burns & Stalker, 1994). Mechanistic structures are typically rated high in the three organizational properties of: • Differentiation (as opposed to integration). This includes the breaking up of work into distinct tasks and organizational units into functional subunits, and their embeddedness in the organizational hierarchy. High differentiation is indicated in cases of clearly identifiable organizational entities and their specialization. High integration is indicated in cases of more mixed and cross-functional work and decision making.

• Formalization (as opposed to organicity). This includes that rules and procedures are explicitly given, typically in written form. This is done to increase efficiency in routine tasks and provide more rational control. Formalization is often associated with bureaucracy. Contrarily, organicity allows for more mutual adjustment and dynamic adaptiveness of actors in the organization. • Centralization (as opposed to decentralization). This identifies the extent to which decisions are made at the top of the organization’s hierarchy. Decentralization refers hereby to decision making at the lower levels of the organization’s hierarchy. The level of centralization, differentiation, and formalization decreases from mechanistic to organic structures (McPhee & Poole, 2000). This section has briefly reviewed the characteristics of the PMO in multiple PMO settings as being structured as either individual islands, networks, or hierarchies. Knowledge and knowledge-related interactions appear to be contingent on this structure and differ by the particular characteristics of these settings. Before reviewing the knowledge governance literature as it relates to networks, a brief summary of the general governance approach to multiple-PMO settings is done in order to understand the context of knowledge governance in different settings. Governance of Multiple PMOs The coexistence of multiple PMOs in an organization calls for governance of them in terms of setting their objectives, providing the means to achieve these objectives, and assessing progress (Müller, 2009; Organisation for Economic Co-operation and Development [OECD], 2004). The distributed nature of roles and responsibilities in multiple PMO settings adds to the complexity of the governance task. The following addresses network governance as a foundation for knowledge governance in multiple-PMO settings.

Governance is frequently explained through transaction cost economics (TCE) (Williamson, 1985) and agency theory ( Jensen & Meckling, 1976), where the former addresses the economics of governance and the latter the information balance between the governing and governed institution (Müller, 2011). TCE aims for minimizing administrative costs by adapting governance structures to the idiosyncratic combination of asset specificity (i.e., the uniqueness of the outcome in a transaction), the general uncertainty of the transaction, and the frequency of similar transactions. For example, higher asset specificity and transaction uncertainty require more governance in terms of contract negotiation and follow-up, control structures, and administrative efforts. This increases the transaction costs (Williamson, 1975, 1985). Agency theory implies an information imbalance between the governing and the governed party, because the governed party knows more about the transaction at hand than the governing party. If both parties want to maximize their utility within the transaction, there is a likelihood of conflict and opportunism from one party at the expense of the other. Overcoming this requires careful contracting to align the interest of the governing and governed institutions, as well as additional control structures, which increase governance costs (Jensen, 2000; Jensen & Meckling, 1976). Contemporary approaches align these two theories within project settings by integrating TCE with agency theory and control theory to balance economic, information, and control objectives (Müller, 2011) or to introduce institutional theory in the form of legitimacy as the third dimension to TCE and agency theory, especially to govern social and moral acceptance of project activities (Müller, 2009). TCE and agency theory help to explain governance in hierarchical or market-oriented structures. However,

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A Case Study in the Pharmaceutical Industry they only partly explain the governance of networks of organizations, such as PMOs. With the present study’s focus on a company’s internal multiple-PMO structures, the hierarchical and network structures are of interest. Provan and Kenis (2008) define three types of network governance: 1. Shared network governance. Here governance is shared by the members of the network, which can be done in formal or informal ways of interaction. It relies on the involvement and commitment of either all or a significant subset of the network members, who are themselves responsible for managing internal and external relationships and coordination. Member commitment is established through symmetrical power distribution within the network in order to foster the collectivity of partners, which is needed for joint decisions and management of network activities. Not all governance activities are necessarily performed through all members. This governance form is most effective in networks with few members with high levels of mutual trust, high consensus about the goals the network wants to achieve, and little need for competencies in coordinating the network in order to achieve its goals. 2. Lead organization-governed networks. In this case, one actor assumes the leader position. This position can emerge from its power or authority, the centrality in the network, or from the members themselves or may be mandated from outside. In these settings, one actor centrally leads all major network activities and key decisions. This form of governance is most effective in networks of moderate size and high levels of trust in the lead organization, as well as moderate levels of consensus about the network’s goals and competences in coordinating the network. 3. Network administrative organization. In this governance setting, a separate 8

external organization governs the network in order to reduce the complexities of internal governance stemming from shared or lead-organization governance. This form of governance is most effective in moderate to large networks (in terms of participants) when the network administration organization is well trusted, moderate goal consensus prevails, and the need for competences in coordinating the network is high. To the best of the authors’ knowledge, the relation between these network governance theories and multiple-PMO structures has not yet been investigated. Knowledge Governance Knowledge governance “. . . grapples with, and solves problems that lie in the intersection of organization and knowledge processes, problems that for various reasons are hard to approach and solve within other knowledge-based approaches” (Foss, 2010, p. 11). Traditionally, the focus of corporate governance and knowledge governance differed, with the former taking a shareholder or stakeholder view (Clarke, 2004) and the latter a resource-based view (RBV) (Penrose, 1959), where, in the latter approach, knowledge is seen as the most important resource of a firm (Grant, 1996). Knowledge governance is used to bridge the macroorganizational (group) level with the micro-organizational (individual) level (Foss, 2007). Learning hereby starts at the level of individual, then expands to team levels, and finally aggregates at the organizational level (Kupke, Lattemann, & Schulz, n.d.). Numerous studies have shown the difficulties in managing knowledge processes in different types of organizations (Hobday, 2000). Research showed that functionally structured organizations tend to build knowledge silos (Prencipe & Tell, 2001), while matrix organizations are inefficient in identifying and creating value from existing

April 2013 ■ Project Management Journal ■ DOI: 10.1002/pmj

knowledge (Van den Bosch, Volberda, & de Boer, 1999). Knowledge governance models were developed by Scarbrough and Amaeshi (2009) for open innovation project settings, while BoschSijtsema and Postma (2010) identified factors enabling knowledge transfer in inter-organizational development projects. Lindkvist (2004) found that governance in R&D organizations with open innovation projects differed from traditional bureaucratic organizations. Pemsel and Müller (2012) showed that knowledge governance practices in project-based organizations in the real estate sector are contingent on structural and situational factors. Grabher (2004) conceptualized that economies of recombination of knowledge accrue at the project level through bricolage, which is “the creation of novel combinations of familiar elements and by-products from previous projects” (p. 1497). The author also theorizes that word-of-mouth judgments of friends and trusted collaborators are used as a replacement of personal experience. Nickerson and Zenger (2004) took a problem-based perspective to understand knowledge flows. They developed a contingency theory by which approaches used by individuals to collect problem solving information depends on the nature of the problem to be solved. Thus, the approaches to knowledge collection are situational dependent. In line with Foss (2010) and Foss et al. (2010), they argue that research in knowledge governance should start at the individual level. The literature review in this section shows a variety of structures for multiplePMO settings that differ in their governance characteristics. This section also shows that the knowledge flows in the various multiple PMO settings are contingent on the situational characteristics and the characteristics of individuals within these settings. This led to an exploratory case-study approach using social network analysis to identify the project management knowledge flows

in the project manager community and a multiple-PMO setting.

Methodology An exploratory case study was done to understand the knowledge flows among and between PMO network members and practicing project managers. The underlying philosophical perspective is critical realism (Archer, Bhaskar, Collier, Lawson, & Norrie, 1998; Bhaskar, 1975), whereby an underlying objective reality is assumed through the mechanics of organizational structures, which give rise to events like projects and their management, which, in turn, give rise to the subjective reality of experiences, such as knowledge exchange within the project management community. A holistic case-study research design with a single unit of analysis was used (Yin, 2009). A sequential mixedmethod approach (Tashakkori & Teddlie, 1998; Teddlie & Tashakkori, 2010) allowed for: (1) a qualitative study to understand the organization and its structures, processes, roles, and responsibilities, especially in terms of PMOs and the project management community; and (2) subsequent development of a questionnaire for collecting data about information flows. SNA allowed constructing topological networks and analyzing the positions and roles of individuals (project managers and PMOs) as well as the overall structure of linkages within the social network. A social network is hereby defined as “a specific set of linkages among a defined set of persons, with the additional property that the characteristics of these linkages as a whole may be used to interpret the social behavior of the persons involved” (Mitchell, 1969, p. 2). This approach collects relational information about the connections between actors, projects, and organizations to assess the specific structures and social opportunities that these structures convey (cf. Scott, 2000; Wasserman & Faust, 1994, for a detailed introduction). SNA enjoys increasing popularity, for example in studies of knowledge

management and knowledge transfer within large organizations (Reagans & McEvily, 2003; Tsai, 2001), informal governance (Lazega, 2001), and the geography of innovation (e.g., Almeida & Kogut, 1999; Powell, Koput, & Smith-Doerr, 1996; Sorenson & Waguespack, 2006). In the realm of project management, SNA studies often investigate the governance and other social structures in project settings (cf. Brookes, Morton, Dainty, & Burns, 2006; Mead, 2001; Pryke & Pearson, 2006). Data Collection and Data Analysis The qualitative study was done through a total of 10 interviews with the roles of PMO manager, PMO member, and project manager. The PMO is a virtual organization, consisting of five virtual oneperson PMOs (which were all interviewed), which work at the department level and are managed by a PMO manager (also interviewed) who reports to the president of the corporation. Four interviews were held with project managers. All interviews were semistructured with the aim of understanding the structure, policies, and practices of the project management community and the PMO part of the organization. Interview data were corroborated by artefacts, like policies, example reports, organizational charts, and so on, to increase reliability. Validity was achieved by interviewing the most relevant persons for understanding the particular setup of project management, the PMO, and its context in the corporation. The interviews lasted between 30 and 90 minutes and were recorded, and notes were taken by one of the researchers. Data analysis followed Miles and Huberman (1994) and Eisenhardt (1989) and led to the design of the SNA questionnaire. For each PMO, the data were cross-validated between respondents. The overall interview findings were later validated in a meeting with the management of the corporation. The SNA study was quantitative in design, using a web-based questionnaire. The aim was to identify the structure of the relations among and between PMOs

and project managers. For that, SNA allows the construct of topological networks reflecting social relationships and the analysis of the positions and roles of individuals or organizations, as well as the overall structure of the linkages within a network. SNA uses relational information about the interaction between individuals, projects, and the organization to assess the specific structures and social opportunities that these structures convey (for a detailed introduction, see Scott [2000] or Wasserman and Faust [1994]). The SNA approach requires high response rates, for example, over 70%, to deliver valid results (Costenbader & Valente, 2003). The survey was distributed to 90 PMO members and project managers, with 89 of them being answered. Thus, an extraordinary response rate of 99% was achieved, thanks to the commitment and support by the PMO manager. This nearly complete dataset offers a unique and firsttime opportunity to analyze the structure of interactions in and between PMOs and project managers. The questionnaire contained two parts. Part one asked 22 questions on the following: • demographics and characteristics of the respondents, such as age, area and degree of education, languages spoken, position in the organization, business function, office location, years of employment with the organization, area of expertise, number of projects worked on, and number of projects as project manager; • individuals’ opinions about the value of knowledge transfer with other colleagues, the overall performance of the PMOs in the organization, the contribution of PMOs to individual knowledge transfers, and the individual contribution of the respondent to the knowledge transfer; and • individuals’ suggestions for improvement of knowledge transfer in the organization. The second part of the questionnaire contained two relational questions to

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A Case Study in the Pharmaceutical Industry capture the individual relationships between the employees with respect to the interpersonal exchange of knowledge. To that end, the questions addressed the central question of who provides/ receives knowledge to/from whom (cf. reliability of data)—that is, an assessment from the perspective of to whom the respondents provided knowledge, but also who provided knowledge to the respondent. Validity and Reliability of the Data Validity of the questionnaire data was achieved through repeated prior interviews about the nature of work and the nature of knowledge requests that employees face in their environment. The questionnaire was first developed in English and then translated into Chinese by one of the authors whose native language is Chinese. The questionnaire was validated by the PMO manager and pilot-tested within the organization. Reliability was achieved through crossvalidation (Hansen, 2002; Krackhardt, 1990). That means if a respondent indicated that he or she provided knowledge to a colleague, the survey also collected information from that colleague to check whether that knowledge was received. The subsequent empirical analysis made only use of those linkages that were confirmed by the sender and the receiver of a workrelated knowledge exchange. In summary, validity and reliability were achieved by checking measures and items, finding appropriate representatives, and obtaining a response rate of 99%, as well as by accepting only cross-validated data for the analysis.

Case Study: Pharmaceutical Corporation The company for this case study is a large development and manufacturing company for medical and health care products with headquarters in China (hereafter called Pharma). Recently Pharma underwent a major transformation by moving from a process orientation to a project orientation. This 10

move toward projectification resulted in significant reduction of friction between line and project management. Project management is a wellestablished and recognized discipline within Pharma. The majority of project managers are very experienced and hold a professional project management certification, which is granted internally. Project management is well structured and formalized within this company. Assignment of project managers to projects is contingent upon the project type, scope, and importance of the projects. Project managers are appointed from the ranks of line managers, unit managers, or technical experts. Project managers are consulted when it comes to performance evaluations of project team members. The majority of projects are shorter than one year and of operational improvement type, such as quality improvement or production process improvement projects. There are five single-person PMOs within the organization, each located in a different functional unit. Collectively they form a virtual corporate PMO, which is led by a PMO manager who reports to the president of the corporation. The PMO’s mission is to facilitate, organize, and manage the project way of doing work. This virtual corporate PMO consists of two subunits: • A group of five virtual PMO members, made up of line managers from different departments and different levels in the organizational hierarchy (e.g., directors, department managers, and their deputies). These managers fulfill a dual role by simultaneously representing a PMO in their line organization and maintaining a functional role as director or department manager. The remaining sections of this article refer to this virtual group. These managers have extensive project management and line management experience. • An information management group for collection and dissemination of project and project management–related

April 2013 ■ Project Management Journal ■ DOI: 10.1002/pmj

knowledge and information, mainly using an IT platform. This group performs knowledge management in the traditional sense. With the present study focusing on the informal knowledge exchange between project managers and PMO members, this group is not further investigated in the present study. Of the approximately 90 project managers in the different departments of the organization, 12 are considered to be experts in their particular area of project management. They are referred to as the “expert group,” and individuals from this group are occasionally asked to consult with the PMO when issues in their respective area of expertise arise. Some of the key functions of the virtual corporate PMO include: • Definition of practices. This includes, among others, the development of methods, processes, and techniques. • Authorizing and validating of projects. The PMO classifies projects as A, B, and C. This categorization is a composite of several measures of project scope, complexity, and importance • Provision of steering committee and escalation functions. The PMO fulfills the steering committee function for projects and is the institution for escalation of unresolved issues from the projects; it governs the projects. • Administration of internal certification program for project managers. This certification program is perceived to be equivalent to the popular external project management certifications but is more tailored toward the corporation’s projects. Annually the Project of the Year and Project Manager of the Year Awards are granted. Knowledge sharing is one of the many criteria for selecting awardees. The incentives associated with this are both monetary and nonmonetary in nature. Through these mechanisms, the virtual corporate PMO sets the context for project management within the organization. This PMO does not

interfere with the project managers’ day-to-day work but governs project management in a subtle and comprehensive manner. Governance of Multiple PMOs The PMO network at Pharma is organized as a hierarchy. Its structural properties of differentiation, formalization, and centralization are medium to high: • Medium level of differentiation of tasks across the organizational layers of PMO and departments. PMO members have a dual responsibility at the departmental and at the corporate levels. An expert group at the project manager level is consulted when needed. • High formalization of work through existing policies and methods, but also through the high level of authority of the PMO when it comes to project selection, steering group functions, escalation functions, internal certification, and performance appraisal of project managers. • High centralization of decision making, with the corporate PMO being the decision-making authority for the development and deployment, but

also the governance, of project management across the organization. Project selection, authorizing, project manager assignment, methodology development, and certification are performed at the corporate level PMO. Steering committee and escalation functions are executed at the department level. PMO developments in the form of methodology changes or certification program updates are done in collaboration with the project management experts from the line organizations. Knowledge governance is accomplished through policies and practices that define the process for knowledge collection and dissemination, mainly by using a central IT platform, which is operated by the second group in the corporate level PMO.

Analysis and Results This section presents results from the SNA. The project managers were from different managerial ranks and were in this role in 2008 and/or 2009. Nine project managers had already left the company or were on maternity leave by the time of the survey.

Statements to be evaluated by the respondents

Project Managers Approve PMO Performance Table 1 shows the project managers’ opinions about the importance of the PMO in knowledge sharing. Project managers say they cannot produce equivalent results without the PMO or their fellow project managers. The PMO is perceived as being effective over the past years. Support by PMOs was mostly in the areas of monitoring and supervising of projects (individual PMO function), as well as provision of project management tools and methods (corporate PMO function). Project managers indicate eagerness to help each other and indicate their dependence on each other’s advice. However, most employees did only partially agree with the statement that their knowledge was being asked for or used by their fellow project managers. Generally, there was a strong belief that a more intensive exchange of knowledge and higher levels of knowledge-based communication would improve the performance of the company. This result supports findings by Hobbs and Aubry (2011) on 500 PMOs, which showed that the recognition of a

Disagree

Agree

My projects would have produced the same results without the PMO.

46

22

13

5

3

0

I do not need any help from the PMO in this firm.

68

13

7

0

1

0

I do not need any help from fellow project managers.

71

8

9

1

0

0

The PMO support has been effective for my projects over the last years.

0

4

16

28

41

0

I have benefited from the PMO in this firm.

1

3

12

22

51

0

My fellow project managers turn to me frequently to seek my advice.

5

11

52

15

6

0

My fellow project managers have adopted and used parts of my project management know-how to improve their project management practice.

7

10

33

17

20

0

I am eager to help my fellow project managers whenever they need advice.

0

0

3

8

78

0

I would like to see more knowledge exchange and contact with other project managers in this firm.

1

1

4

14

69

0

Exchanging more knowledge between project managers would increase the performance of the company.

1

1

6

18

63

0

Note. N ⫽ 89 project managers.

Table 1: Importance of PMO and knowledge sharing. April 2013 ■ Project Management Journal ■ DOI: 10.1002/pmj

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A Case Study in the Pharmaceutical Industry PMO’s expertise is one of the four variables explaining the performance of projects and programs. However, the same research showed that respondents ranked competency improvement of PMO personnel as the second most important element (Hobbs & Aubry, 2010). Project Managers Overestimate Their Role as Knowledge Providers SNA reveals the patterns of dyadic interaction between project managers in the corporation. Therefore, the relationships of an actor (i.e., a member of the project management community) are of relevance. Two questions were asked to identify dyadic relationships: (1) who are the people I help? and (2) who are the people who help me? The majority of knowledge provision happened within the survey group. The 89 surveyed employees exchanged knowledge with another 115 contacts inside or outside the firm. The further analysis focuses on the 89 project managers. Theoretically, the answers to the two questions on knowledge exchange should yield identical results. However, in reality they do not. The initially stated 196 relationships between employees (who I help), were only confirmed by 87 respondents (who helps me). Six employees were not provided with help according to the information provided by the other colleagues, whereas 29 employees have not provided any help. This suggests that (1) employees tend to overestimate their importance in knowledge provision, (2) recipients do not always acknowledge or value the appropriateness of new knowledge, or (3) they do not credit new knowledge to the source of that transfer. Subsequent analyses are based on the more conservative measure of those relations through which knowledge was actually received and credited by a source. PMO Members Gain Little Popularity in Interpersonal Knowledge Flow The assessment of individuals’ popularity in knowledge transfers between 12

Note: People were asked if they had ever suggested new best practices to project management: “Which best practices have you contributed to the project management office? Please provide some key words.” If respondents said that they had suggested new practices, they appear in dark gray; otherwise, they are light gray.

Figure 1: Four clusters of knowledge sharing.

project managers and the PMO/expert group suggest a rich structure of peerto-peer knowledge transfers. On average, the PMO and expert group transfer knowledge slightly more often than project managers. However, PMO members seem to be less central than many project managers in the overall knowledge network. The relational popularity of a manager in a network is measured by their outdegree. This is the number of contacts a manager has provided with knowledge and was credited with knowledge receipt from that source. The higher the outdegree, the greater the popularity in the knowledge network. The top group of knowledge providers consists of regular project managers, who have been credited up to seven times by their colleagues. None of the PMO and expert group members achieve comparable levels of popularity. They appear to be less prominent in the knowledge provision network. Twenty project managers (nearly a quarter of the sample) achieve higher popularity than the average PMO and expert group member.

April 2013 ■ Project Management Journal ■ DOI: 10.1002/pmj

Quasi-Islands of Knowledge Exchange The knowledge network in Figure 1 shows the pattern of knowledge flows through the project management community. Four clusters of interpersonal knowledge sharing can be identified. These are distinct clusters of employees and one residual group of so-called isolates. The latter are individuals who don’t share knowledge with any of the other project managers. Ninety percent of the 87 knowledge exchange relationships are captured within the four clusters. Only ten relations span over cluster boundaries (see Figure 1). Three of these clusters are made up of 12 employees and one of 22. Thirty-one of the employees are isolates with no exchange relationships. Each cluster is built around a PMO member, with the largest cluster forming around two PMO members. The clusters are relatively homogeneous in terms of the demographics of its members, such as gender, age, the year in the current position, and the highest degree of education. The clusters also show similarities in the share of people who have

suggested new best practices and who have seen these practices being used. Significant differences between the clusters are found in the average work experience. The bigger cluster with 22 employees is composed of members with the highest experience—that is, where the mean number of completed projects is 17. Contrarily, the isolates had the least amount of projects worked on (i.e., mean ⫽ 7). The other three clusters (each made up of 12 employees) varied between mean numbers of 8, 10, and 16 projects. There is an indication that an individual’s propensity for knowledge exchange develops with the number of projects they worked on. This bears the question of who the boundary spanners across clusters are. All boundary spanners contributed new best practices to the PMO. This indicates that spanning from one group to another requires some redundant communication and some energy and initiative taking by the respective managers. Only a subset of those who also contributed to new knowledge creation are also boundary spanners. Knowledge Sharing Comes With Prior Collaboration What causes managers to select the people they exchange knowledge with? Does previous collaboration on project teams enhance knowledge exchange in the future? A comparison of the network of knowledge sharing with the historically cumulated pattern of prior project collaboration between all employees identifies the network of interpersonal knowledge exchange. Analyzing the overlap of the relations shows that nearly two-thirds of all knowledge sharing relations (62.1% of “who provided me with PM-knowledge”) were also found in the comembership network of prior project collaboration. This indicates that prior collaboration on joint projects provides the opportunity for establishing trust and identifying others’ expertise to draw from in the future. Collaboration, therefore, increases

the likelihood to share knowledge in the future.

Discussion The analysis findings can be summarized as: • The members of the PMO and the project managers tend to overestimate their importance as knowledge providers. Less than 50% of the relations reported as being “sent” were acknowledged as being “received.” Therefore, the analysis focused on the acknowledged reception of knowledge. Project managers in the case study Pharma company actively shared their project management knowledge with colleagues, and these valued this knowledge transfer. • The role of the PMO is well appreciated. However, the PMO did not occupy a pronounced role in dyadic knowledge transfer. PMO members (including the expert group) only reached average centrality in distributing knowledge across the network. Knowledge exchange between PMO members appears to be absent. PMO members transferred knowledge to project managers but not among themselves. This result is coherent with the emptying process suggested by Pellegrinelli and Garagna (2009), where PMO members share their knowledge in the organization only to a certain point, such as the point where the PMO has no more value to add. New knowledge to be developed within the PMO would require exchanges between PMO members, which seem to be done more in formal meetings than ad-hoc in day-to-day work. • Four distinct clusters cover 90% of all interpersonal knowledge transfer. Each cluster (except one) contains one PMO member. Knowledge exchange across these clusters was exclusively done by the most innovative project managers. In other words, crossing a cluster’s border happened only when there was something new to share.

• The most often stated barrier for more effective knowledge transfer is time constraints. Daily workload was mentioned as the primary hinder for knowledge transfer by almost half of the managers. However, a quarter of all respondents didn’t identify any barrier. This indicates that most project managers wanted to intensify knowledge exchange and are convinced that this would leverage corporate performance. • Involvement of employees from other functional departments in projects and case studies (e.g., to analyze the advantages and disadvantages from one case) was suggested by some of the managers. This is indicative of a high fragmentation of know-how between the PMO managers and their virtual communities of project managers. More trainings, meetings, and overall interpersonal exchange were desired by the project managers and the creation of meeting places was an important concern in the survey. In any case study (from western or eastern countries), cultural aspects come to play a significant role in the overall context and should be taken into consideration when interpreting results. Taking the Stan Shih company as a model, Chen and Miller (2010) argued for an ambicultural approach to management where strengths are taken both from East and West while avoiding weaknesses from both sides. Looking specifically at the Chinese side, they identified three practices that help Stan Shih to succeed: long-termism; harmony and collectivism; and seniority and mentorship. Even though the focus of this research was not the Chinese culture as such, all three practices can be found in this Pharma case. Project management is implemented as a central strategy to the company with a long-term vision. Implementation of a virtual PMO, instead of a formal entity, is quite interesting in view of the Chinese practices of harmony and collectivism. A PMO can easily lead to tensions or conflicts

April 2013 ■ Project Management Journal ■ DOI: 10.1002/pmj

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A Case Study in the Pharmaceutical Industry (Aubry, Hobbs, Müller, & Blomquist, 2011). The need for some sort of centralized coordination was acknowledged in the creation of a PMO, but it has been implemented in a way to avoid tensions and favor a common sense of working together. Mentorship is the basis of what has been found, not so strong from virtual PMO members, but among the project management clusters. If they have played a role in the knowledge flow, these cultural characteristics could certainly be borrowed and diffused in the West.

Conclusion This study investigated the knowledge exchange among and between project managers and PMO members as a precursor for developing organizational knowledge governance structures. A case study was conducted at a pharmaceutical research, development, and manufacturing company in China. Ten interviews were held to understand the particular organizational setting and to develop a questionnaire for assessing knowledge flows. Eighty-nine of the 90 members of the project management community answered the questionnaire, yielding a response rate of 99%. The research question can now be answered: What are the knowledge exchange practices among and between the PMO and the project managers in their particular projects? SNA showed that PMO work is essential for good project results. However, PMO members are not the most popular knowledge providers in the company’s project management community of practice. Popularity seems to be based on the individual’s prior collaboration. Project managers who worked together in the past are likely to ask each other for help in the future. Knowledge exchange is mainly done in clusters of project managers, where each cluster forms around one or two PMO members. This indicates a facilitator role of PMOs in knowledge exchange at the cluster level. Only a few linkages exist between the clusters, 14

making the knowledge exchange across the project management community of practice vulnerable to individuals’ motivation to share knowledge. PMO members do exchange very little knowledge among themselves. In terms of knowledge governance, the results show that related corporate knowledge governance processes need to take into account existing relationships among project managers and cluster building around PMO members. Knowledge governance structures should support the natural knowledge exchange patterns as shown in this study, and should also provide the processes and techniques to allow for increased knowledge exchange across clusters and between PMO members. The vulnerability of the organizationwide knowledge exchange should be minimized by stimulating knowledge exchange across clusters through joint events or member exchanges across clusters. This conclusion leads to the suggestion for a three-tiered knowledge governance structure: • Tier 1 (intra-cluster level): processes and practices should allow for sharing of knowledge and creation of awareness about existing tacit and explicit knowledge at the cluster level. That can include physical meetings of the cluster members with the aim of sharing and presenting their latest experiences, but also joint social media like blogs, wikis, or other means of collaboration to exchange knowledge within clusters. This should be facilitated by the respective PMO in the PMO network or hierarchy. Care should be taken to invite project managers who collaborated in the past and may work on similar project types or challenges currently or in the future. • Tier 2 (inter-cluster level): policies and practices should allow sharing knowledge across clusters. This should be stimulated by the PMO members. The PMO members should take an active role in exchanging knowledge among themselves before they initiate inter-cluster

April 2013 ■ Project Management Journal ■ DOI: 10.1002/pmj

activities. These events can take the form of annual conferences within an organization, but also in the form of scheduled virtual meetings for those clusters that need to collaborate. This may be corroborated by a Tier 2 level social network using Q&A websites, blogs, and/or wikis at an organizational level to exchange knowledge across clusters. These activities should be coordinated through the network of PMOs and governed in line with a network governance approach (shared, centralized, external, or hierarchical— see the Literature Review section). • Tier 3 (organizational level): processes and practices should be synchronized with corporate governance and project governance approaches. Processdriven (i.e., behavior controlled in the sense of Müller [2009]) organizations should include tier 1 and 2 activities in their processes and a remuneration system to ensure these activities are executed. Outcome-oriented organizations (Müller, 2009) should emphasize the need for tier 1 and 2 activities as an investment in future project results. To that end, the organization should have a few role models for the wider community of practice who show the value of using knowledge exchange for results in future projects. Shareholderdriven organizations (Clarke, 2004) should hereby emphasize the increase in return on investment for the owners, whereas a stakeholder-driven organization (Clarke, 2004) should emphasize the additional value for the wider stakeholder community, arising from the structured exchange of knowledge through the three tiers of knowledge governance. Managerial Implications The implications for managers are described above in the three-tier model. To implement this model, managers should: • Use existing tools and databases to identify collaborative relationships for effective selection of project managers for tier 1 activities.

• Train project managers in the need for and value creation of the three tiers of knowledge governance. • Link the particular participation of project managers and PMO members in the three tiers to their remuneration system. • Adjust the knowledge governance practices to the corporate and project governance structures to avoid friction and conflict. • Govern knowledge management at the highest level of the organization to obtain support and show its importance. Theoretical Implications This study integrates two complementary theoretical perspectives, which together provide a rich understanding of the complex phenomenon of knowledge exchange in project management communities of practices: network theory and knowledge governance. This pluralism in theoretical approaches allows an in-depth understanding of the phenomenon. This supports Denis, Langley, and Rouleau’s (2007) and Greenwood and Miller’s (2010) claim that a combination of multiple theoretical perspectives is needed to understand complex phenomena. The mixed-method approach chosen contributed to the understanding of the phenomenon by first developing an understanding of the case study company’s structure and then assessing the knowledge exchange practices. To that end, we were able to identify the context of the phenomenon through interviews, and to assess the phenomenon per se through a questionnaire-based study. This research has a number of limitations. It is based on a single case study; therefore, no generalizations can be taken from it. The sample size of the community of practice assessed is relatively small, and the results may be largely influenced by the particular hierarchical structure of the case study company. These weaknesses also have their positive side. The particular strengths of the study are in the high response rate of 99% and the sole use of mutually confirmed

knowledge exchanges. This strengthens the reliability of the results. This case study setting allowed for a deep insight into the specifics of the organization, which would not be possible through other methods. The results indicate the need for further case studies following a similar approach to identify the variety of practices that should underlie knowledge governance structures. After a series of further case studies, a set of hypotheses can be developed and tested quantitatively using a global study. The study’s contribution to knowledge is in the identification of antecedents for the applied practices for knowledge exchange among and between project managers and PMO members in a project management community of practice. The results should be used to carefully design knowledge governance structures that make the best of naturally existing knowledge exchange structures, lift them up from cluster to organizational level, and link them to existing corporate and project governance structures.

Acknowledgment A preliminary version of this article was presented in July 2010 at the PMI Research and Education Conference, Washington, DC, USA. ■

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Ralf Müller is a professor of project management at BI Norwegian Business School in Norway. His principal research interest is leadership and governance of projects, programs, portfolios, and project management offices (PMOs). He is the author or coauthor of more than 130 publications, and, among other accolades, the receiver of the 2012 IPMA Research Award, which he received together with Monique Aubry and Brian Hobbs, and the Project Management Journal’s 2009 Paper of the Year Award. He holds an MBA from Heriot Watt University and a DBA degree from Brunel University in the United Kingdom, and a Project Management Professional (PMP)® credential from the Project Management Institute. Before joining academia, he spent 30 years in the industry consulting with large enterprises and governments in 47 different countries for their project management and governance. He has also held related line management positions, such as the worldwide director of project management at NCR Teradata. Johannes Glückler is a professor of economic and social geography and research fellow at the Marsilius Center for Advanced Study at the University of Heidelberg. He received his PhD from the University of Frankfurt. Previously, he was a professor of economic geography at the Catholic University of Eichstätt-Ingolstadt. His research interests are in the areas of economic geography, social networks, and service industries. He has written on relational economic geography, the geography of knowledge, and organizational networks in journals such as Organization Studies, the Journal of Economic Geography, Regional Studies, and the Service Industries Journal. He is coauthor of the monograph The Relational Economy (Oxford University Press, 2011), which analyzes the geographies of knowing and learning in the global knowledge economy.

Monique Aubry, PhD, is a professor in the project management programs in the School of Management at Université du Québec à Montréal (UQAM). Her principal research interest bears on organizing for projects and organizational design, more specifically on project management offices (PMOs). She received the 2012 IPMA Research Award for her research on

PMOs along with Brian Hobbs and Ralf Müller. The results of her work have been published in major academic journals and presented at several international conferences, both research and professional. She is a member of the Project Management Research Chair (www.pmchair.uqam.ca). She is also a member of the Standards Member Advisory Group and the Research Informed Standards Steering Committee of the Project Management Institute.

Jingting Shao, PhD, MSc, is a postdoctoral researcher at the Institute for Industrial Economics at the Chinese Academy of Social Sciences and the vice president of China’s Young Crew project manager organization within the International Association of Project Management (IPMA). She holds two doctoral degrees, one from SKEMA Business School (Lille, France) in strategy, program, and project management and one from Northwestern Polytechnical University

(Xi’an, China) in management science and engineering. Her research interests are in program management, leadership, and project governance. In 2011, she was awarded the IPMA Outstanding Research Contribution of a Young Researcher Award and in 2012, the China Project Management Research Contribution Award. She has participated in several international research projects sponsored by the Project Management Institute and the Norwegian Centre for Project Management.

April 2013 ■ Project Management Journal ■ DOI: 10.1002/pmj

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