Behavior of Internal Stakeholders in Project Portfolio Management and Its Impact On Success

JPMA-01472; No of Pages 17
Available online at www.sciencedirect.com
International Journal of Project Management xx (2013) xxx – xxx

www.elsevier.com/locate/ijproman
Behavior of internal stakeholders in project portfolio management and its

impact on success
Claus Beringer a,⁎, Daniel Jonas b , Alexander Kock c
a
Siemens AG, Otto-Hahn-Ring 6, 81739 Munich, Germany
b
Campana & Schott, Friedrichstrasse 122/123, 10117 Berlin, Germany
c
Technical University Berlin, Chair for Technology and Innovation Management, Strasse des 17. Juni 135, Sekr. H 71, 10623 Berlin, Germany
Received 23 July 2012; received in revised form 5 November 2012; accepted 8 November 2012
Abstract
Stakeholder behavior and stakeholder management are key success factors within project portfolio management (PPM). This empirical study of
197 project portfolios investigates the effect of the intensity of engagement (IoE) of portfolio-internal stakeholders on project portfolio success. We
show that the effect of stakeholders is phase-specific and that role clarity as a measure of PPM maturity affects the nature of the relationship
between the IoE of stakeholders and portfolio success. The effects of the IoE of senior managers on success are not clearly positive with regard to
strategic portfolio structuring and are even negative in operative portfolio steering in established PPM systems. In immature PPM systems, line
managers tend to take advantage of their position in resource management. Surprisingly, the influence of portfolio managers in portfolio steering is
insignificant. Altogether, this paper shows the diverse effect of the IoE of stakeholders on portfolio success. This study enriches project research by
applying stakeholder theory to the project portfolio context and offers practical guidance for further professionalizing PPM.
© 2012 Elsevier Ltd. APM and IPMA. All rights reserved.
Keywords: Project portfolio management; Stakeholder management; Stakeholder behavior; Project portfolio success
1. Introduction Both research and practice suggest that stakeholders with

the ability to influence projects play a crucial role in the
Increasingly, companies have driven the projectification of their successful management of projects (Aaltonen, 2011; Assudani
activities, which has been reflected in substantially increasing and Kloppenborg, 2010; Wang and Huang, 2006). Moreover,
shares of spending for project-organized ventures (Dahlgren and in the professional and academic management literature, a
Söderlund, 2010; Lundin, 2011). However, the assumed advan- common view is that stakeholder management and perfor-
tage in the controllability of single projects comes along with a loss mance are strongly related (Donaldson and Preston, 1995).
of transparency and thus the effectiveness of the entire collection of Additionally, stakeholders and their interests may be affected
projects in a firm (Elonen and Artto, 2003). Therefore, companies by projects or project outcomes; thus, from an ethics and
that handle numerous projects simultaneously require a structured sustainable management perspective, they must not be ignored
management approach for project portfolios, and project portfolio in project management, which is reflected in some definitions
management (PPM) thus becomes a key competence to implement of project success (Freeman et al., 2007; Turner, 2009).
strategies and remain competitive (Dietrich and Lehtonen, 2005; For programs of projects, which can be understood as a
Killen et al., 2008; Martinsuo and Lehtonen, 2007). specific type of project portfolio (Artto and Dietrich, 2004,
rephrased from OGC, 2003), the crucial relevance of stake-
⁎ Corresponding author. Tel.: + 49 30 314 26090; fax: + 49 30 314 26089.
holders in successful management has been discussed in the
E-mail addresses: claus.beringer@siemens.com (C. Beringer), literature (Lycett et al., 2004; Pellegrinelli et al., 2007). In fact,
daniel.jonas@campana-schott.com (D. Jonas), alexander.kock@tim.tu-berlin.de Lycett et al. (2004) view stakeholder management as the basis
(A. Kock). of effective program management. Stakeholder management as
0263-7863/$36.00 © 2012 Elsevier Ltd. APM and IPMA. All rights reserved.
http://dx.doi.org/10.1016/j.ijproman.2012.11.006
Please cite this article as: Beringer, C., et al., Behavior of internal stakeholders in project portfolio management and its impact on success, International Journal of
Project Management (2013), http://dx.doi.org/10.1016/j.ijproman.2012.11.006
2 C. Beringer et al. / International Journal of Project Management xx (2013) xxx–xxx
a discipline has been integrated into program management The fairly new area of project portfolio management research
guidelines (e.g., Pellegrinelli, 2008; PMI, 2008b), although has thus far focused on formalization. The extant literature
research on the topic remains relatively scarce. focuses on describing what project portfolio management com-
Building on the literature on project, program, and general prises or should comprise. Numerous scholars address the pro-
management, we argue that the relevance of stakeholders for cesses, tasks, and instruments of PPM (e.g., Cooper et al., 2001;
success also applies to project portfolio management, which is Levine, 2005; PMI, 2008a; Teller et al., 2012). This rather
supported by the work of several scholars (Levine, 2005; Turner, technocratic view provides valuable and necessary yet in-
2009). The management of an entire portfolio of projects is a sufficient knowledge for the successful management of project
distributed process (Jonas, 2010) that is often located in more than portfolios. As scholars have discussed in the strategic man-
one organizational unit and thus directly or indirectly involves, agement domain (Freeman et al., 2007) and for program
affects, and is affected by several groups and individuals. Hence, management (Lycett et al., 2004), also in PPM we must obtain
not only stakeholders of single projects affect the success of a a better understanding of stakeholders, their behavior, and its
portfolio but also stakeholders of the portfolio as a whole who are effect on success to be able to manage project portfolios
either directly involved in the PPM process, can influence the effectively and efficiently. As a first step, this requires an
success of the portfolio otherwise, or are affected by the portfolio. assessment of stakeholder behavior and its consequences. As a
Scholars in stakeholder research have developed various second step, we must explain the choices of specific behavior
conceptualizations and definitions of stakeholders (for an over- by identifying the antecedents of stakeholder behavior.
view, see Mitchell et al., 1997). However, the pioneer work of Surprisingly little research addresses organizational stake-
Freeman (1984) defined a stakeholder as “any group or individual holder behavior in a strategic management or project context
who can affect or is affected by the achievement of the (Aaltonen and Kujala, 2010; Frooman, 1999; Rowley and
organization's objectives” (p. 46; similar wording in Freeman et Moldoveanu, 2003), and almost no studies specifically address
al., 2010), and this definition is still widely used and forms the the PPM context with very few exceptions that cover only
basis for many other definitions. Thus, drawing on stakeholder single aspects of stakeholder behavior and PPM (e.g., Unger et
theory, we define project portfolio stakeholders as any group or al., 2012). Furthermore, the current stakeholder research pro-
individual in a relationship with a project portfolio, such that the vides only a limited number of empirical analyses. The
group or individual can affect or is affected by the achievement of described research deficits are consistent with the recommen-
the portfolio's objectives (similar definition for program dation of Freeman and McVea (2001) to apply the insights of
management in PMI, 2006). Because PPM is a distributed stakeholder theory to “real-world problems” rather than
process (Jonas, 2010), in one context related parties can be part of focusing entirely on the development of theory.
the management of “the organization” (in Freeman's, 1984, hub To address this deficit in stakeholder and project portfolio
and spoke definition) that manages (for) stakeholders. In another research, this article takes the first step in understanding
context, those related parties can be stakeholders. Therefore, the stakeholder behavior by analyzing its consequences and
portfolio (and its objectives and decision making) that is posing the following general research question: How does the
represented by different players in the PPM process could be behavior of internal stakeholders influence project portfolio
perceived as being in the middle of this hub and spoke system. success? To reduce the complexity of our analysis, we divide
Hence, our stakeholder definition includes all groups that “have a the research question into three more specific questions.
stake in” such a portfolio acknowledging that these groups may Describing stakeholder behavior in greater detail with
also be part of the organization that is managing (for) stake- respect to PPM, the most basic question addresses the extent
holders (Evan and Freeman, 1988, pp. 75–76). Goodpaster to which stakeholders engage themselves in PPM activities.
(1991) has noted that Freeman's definition (1984) implies the
Q1. How does the intensity of engagement of stakeholders
notion of two types of stakeholders: strategic (affecting) and
influence project portfolio success?
moral (being affected). Further, Freeman (1984) differentiated
with respect to organizational aspects between firm internal and
In this question and in the overall paper, the engagement of
external stakeholders.
stakeholders refers to the involvement and activity of stake-
The focus of this paper is on strategic stakeholders (i.e., those
holders themselves and not to the often used understanding as
affecting project portfolios) while acknowledging that moral
management actions to increase stakeholder involvement.
stakeholders can also become strategic over time (Goodpaster,
Project portfolio management definitions are often based
1991) and that, from a normative perspective, management
on a process with several activity clusters, steps, or phases
actions should follow ethical guidelines and also serve moral
(e.g., Thiry, 2007). For example, Levine (2005) noted that the
stakeholders (Freeman et al., 2007). Further, we focus on
right stakeholders should be involved in the right PPM process
portfolio-internal strategic stakeholders (i.e., those who are
steps. Thus, we ask:
directly involved in the PPM process) because they constitute
the core of PPM. As such, we expect these stakeholders to be a Q2. How does stakeholders' influence on success vary across
major source of influence with respect to project portfolio different PPM phases?
success. Thus, we define four strategic internal stakeholders of
PPM: senior managers, mid-level line managers, project Because PPM is a fairly new management system that
portfolio managers, and project managers. involves several internal stakeholders, we expect that stakeholder
C. Beringer et al. / International Journal of Project Management xx (2013) xxx–xxx 3
role clarity may influence the relationship between stakeholder portfolio planning, evaluating project proposals, and
behavior and project portfolio success. Hence, we ask: selecting projects in a considered manner. Such activities
are to be conducted recurrently in alignment with a firm's
Q3. How is the influence of stakeholder behavior on success
(strategic) planning cycles (Platje et al., 1994). There-
affected by role clarity?
with, portfolio structuring aims for strategic orientation
among large project landscapes.
We use data from a large sample of project portfolios in
(2) Resource management connects the initial recurrent
German, Austrian, and Swiss firms to analyze the effect of the
resource allocation in the portfolio structuring phase
intensity of stakeholder engagement on project portfolio
with the permanent reactive reallocation in the portfolio
success. Because the level of analysis is the portfolio level
steering phase. It aims for the effective and efficient
rather than the project level, the relevant stakeholders include
allocation of project resources across the entire portfolio.
senior managers, line managers, and project portfolio man-
It refers specifically and only to resource management
agers. Project managers are also included because they are
activities in the narrow context of project landscapes
involved in PPM and represent project teams and customer
(Elonen and Artto, 2003; Hendriks et al., 1999; Martinsuo
interests at the portfolio level.
and Lehtonen, 2007), such as cross-project resource
The contributions of this paper are threefold. First, we
planning and project resource approvals (Arvidsson,
contribute to stakeholder theory by applying this theory to
2009; Blichfeldt and Eskerod, 2008).
PPM, integrating it with other management approaches and
(3) Portfolio steering covers all ongoing activities for the
thus fostering its explanatory value and relevance. Second, the
continuous coordination of portfolios (Müller et al.,
current study contributes to PPM research by helping to
2008). This involves gathering information for the con-
explain the relevance of stakeholders to PPM and shifting the
tinuous monitoring of strategic alignment in the event of
current focus in the extant literature from formalization toward
deviations from the target portfolio, developing correc-
understanding further aspects that are critical for successful
tive measures, coordinating projects across organization-
PPM. Finally, the current findings contribute to practice by
al units to identify project synergies, and detecting and
enabling managers to address stakeholders more effectively
canceling obsolete projects (Loch and Kavadias, 2002;
through increased understanding of stakeholder behavior and
Zirger and Hartley, 1996). Hence, the goal of portfolio
its consequences. Thus, our findings also provide guidance for
steering is to enhance the adaptive capacity and flexibility
further establishing and professionalizing PPM.
of a firm regarding portfolio internal and external
changes that may arise on short notice during a planning
2. Theoretical background
period (Geraldi, 2008, 2009; Spillecke, 2006).
2.1. Project portfolio management
Project portfolio success can encompass multiple dimen-
sions and perspectives (Cooper et al., 2001; Jonas et al., 2012;
Project portfolios have been defined as collections of
Müller et al., 2008). For the purposes of this study, we
projects that are conducted under the sponsorship and/or
concentrate on an operative short-term perspective and a
management of a specific organization and that compete for
strategic long-term perspective. The first perspective encom-
scarce resources (Archer and Ghasemzadeh, 1999). A corre-
passes the cumulative success of all projects in a portfolio.
sponding definition of project portfolio management has been
Therefore, average project success is defined along the three
presented by Blichfeldt and Eskerod (2008), who described the
familiar dimensions of the project management triangle: cost,
“managerial activities that relate to the initial screening,
schedule and quality (Gardiner and Stewart, 2000). Delivering
selection and prioritization of project proposals, the concurrent
projects within budget, on time, and according to specifica-
reprioritization of projects in the portfolio, and the allocation
tions are well-known criteria for measuring project success
and reallocation of resources to projects according to priority”
(Lechler and Dvir, 2010; Pinto and Prescott, 1990; Shenhar et
(p. 358). We follow this definition. Based on a process-
al., 2001). To analyze success from the portfolio perspective,
oriented understanding of project portfolio management, the
we define these project success criteria as the average across
scope of managerial activities can be structured along three
all projects within a portfolio. There is an important difference
generic and recursive main phases: portfolio structuring,
between single project success and average project success
resource management, and portfolio steering. In general,
across the entire portfolio. The latter is a portfolio performance
firms may not necessarily accomplish all phases to the same
criterion that is determined both by individual project
extent and quality. However, the process model generally
characteristics and by the interdependence between projects.
provides a comprehensive understanding and a differentiated
For the second perspective, the literature typically applies
view of the scope of activities and research fields that relate to
the concept of strategic fit of a portfolio, which reflects the
project portfolio management.
internal strategic fit perspective (Carmeli et al., 2010; Miller,
1996; Rivkin, 2000; Siggelkow, 2002). This perspective refers
(1) Portfolio structuring includes all initial activities that are to the alignment of project objectives and resource allocation
involved in building a target portfolio using a given corresponding to the strategic relevance of projects (Hendriks
business strategy (Meskendahl, 2010), such as strategic et al., 1999; Kaplan and Norton, 2005; Meskendahl, 2010;
Payne, 1995). In the context of project portfolio management, influence of stakeholders: Neville and Menguc, 2006; Rowley,
we define strategic fit as the degree to which the objectives and 1997). To describe stakeholder behavior with respect to its
demands of a portfolio's projects are consistent with the effect on an organization's objectives, our thorough literature
objectives and demands of the overall organizational strategy review reveals primarily two aspects. First, scholars describe
(e.g., Unger et al., 2012). This specifically refers to the whether stakeholders are supportive or are interfering and
alignment of project objectives, such as a project's compliance opposing with respect to a targeted achievement (e.g., Reiss et
with and contribution to an intended strategy, and the alignment al., 2006; Savage et al., 1991). McElroy and Mills (2007) and
of project demands, such as resources that are allocated across a Bourne (2009) enrich this categorization by differentiating
portfolio such that the most effective resources are provided to between passive and active support or opposition as well as
those projects with the highest strategic relevance (Dietrich and neutral behavior. Whereas “supportiveness” describes the
Lehtonen, 2005; Meskendahl, 2010). direction of behavior, in the last categorization, it is already
mixed with the amplitude of behavior (i.e., passive versus active).
2.2. Managing (for) stakeholders We denominate this second aspect that describes the extent of
engagement as the “intensity of engagement”. This aspect is
According to Phillips et al. (2003), “stakeholder theory is a reflected, for example, in the concept of stakeholder salience
theory of organizational management and ethics” (p. 480). The according to Mitchell et al. (1997) or the work of Rowley and
basic assumption of stakeholder theory is that a firm, as Moldoveanu (2003) on stakeholder mobilization with degrees of
represented by its management, has relationships with many engagement from passive to highly active and engaged. Thus, the
constituent groups of individuals within the firm and in its intensity of engagement as an aspect of stakeholder behavior
external environment, and that those groups play a vital role in reflects the extent to which project portfolio management actions
the firm's success, and the interests of all (legitimate) stake- are performed by the respective stakeholders. In contrast, the
holders are of intrinsic value (Clarkson, 1995; Donaldson and influence strategies discussed by Frooman (1999) describe—on a
Preston, 1995; Freeman, 1984). Although rooted in strategic meta-level—the “means” of stakeholder behavior to forward
management, the stakeholder concept has been applied to other stakeholder interests and influence decision making. These
research fields, such as project management. Also in program “means” or strategies may materialize in a specific intensity of
management scholars have increasingly advocated for integrating engagement and in qualitative aspects of stakeholder behavior,
the idea of stakeholder theory (Lycett et al., 2004); the extant such as “supportiveness”.
literature is primarily practitioner-oriented, and empirical In the introduction of this paper, we based our definition of
research remains relatively scarce. project portfolio stakeholders on the seminal work of Freeman
For project portfolio management, which is closely related (1984). We introduced the four strategic internal stakeholders
to program management, the standard literature and guidelines of PPM (senior managers, mid-level line managers, project
implicitly account for the relevance of stakeholders, as many of portfolio managers, and project managers) which we define in
them at least mention or even address aspects of stakeholder greater detail in the following section.
management (e.g., PMI, 2008a; Thiry, 2007). However, in
project portfolio management, research on stakeholders has (1) Senior managers. According to upper echelon research,
received even less attention than in program management. senior managers are the key decision makers of an
Similar to stakeholder research in strategic management, organization (Carpenter et al., 2004; Gallén, 2009). They
scholars have focused on identifying stakeholders that may are assumed to surmount barriers to change by utilizing
influence an organization's decision making, analyzing the hierarchical potential (Rost et al., 2007). In the PPM
types of claims that they have and categorizing stakeholders context, senior managers must decide on processes and
(e.g., Mitchell et al., 1997). In the PPM realm, the work of standards for the overall project organization in general
Jonas (2010) and the PPM standard in PMI (2008a) can be as well as the prioritization, selection, and evaluation
viewed as initial steps in identifying the key roles in the PPM mechanisms. Top-level managers must approve the
process and assigning their targeted responsibilities. However, target portfolio from a strategic perspective. Whenever
these first steps do not account for the claim of some scholars that fundamental conflict situations occur or senior managers
we must gain a better understanding of stakeholder behavior to be observe deviations from the target portfolio, they must
able to manage stakeholders effectively (Aaltonen and Kujala, deliver timely decisions for reallocating resources or
2010; Frooman, 1999; Lycett et al., 2004). In strategic and project reprioritizing projects. Thus, under normative conditions
management, so far only a very limited number of scholars have and given a process-oriented understanding of PPM, the
addressed aspects of stakeholder behavior explicitly (Frooman, key phase for senior manager engagement is the portfolio
1999; Frooman and Murrell, 2005; Hendry, 2005; Tsai et al., structuring phase.
2005; project management: Aaltonen and Kujala, 2010; Aaltonen (2) Mid-level line managers. Stakeholders who are below
et al., 2008). Few scholars have implicitly covered behavioral senior management but not necessarily above (and
aspects, such as Mitchell et al. (1997), who presented a increasingly alongside) project managers can be classed
categorization of stakeholder salience. with middle management. However, their position in the
Some further researchers have added relevant aspects to the hierarchy of an organizational structure does not solely
general research on stakeholder behavior (e.g., on the mutual characterize middle management. Their uniqueness stems
from their easy access to top management combined with phases in a different manner. With respect to portfolio
their knowledge of operations (Raes et al., 2011; structuring, these managers are expected to reach the
Wooldridge et al., 2008). Mid-level line managers can agreed-upon project objectives to realize the planned
be found in different forms, such as general line project value. Regarding resource management, project
managers or functional line managers, and play a crucial managers must comply with given resource commitments
role in project portfolio management processes. In a through robust project planning and leading to future
traditional matrix environment, these managers are competence development. With respect to portfolio
considered resource owners who are responsible for the steering, project managers are responsible for the
effective and efficient assignment of departmental em- continuous delivery of timely and reliable project status
ployees (Platje et al., 1994). They act in a decentralized information to allow for cross-project optimization and
manner and are assumed to optimize the objectives of an mutual collaboration across project borders.
organizational subsystem, such as their department or
function. Moreover, line managers typically lead lower Each of these stakeholders is supposed to comply with his
organizational levels and are responsible for consistent or her specific role with respect to the PPM process. Thus, to
and reliable resource commitments and project execu- explore stakeholder engagement in PPM, one must consider
tion. Finally, line managers are considered to act as the degree to which stakeholder roles in the management
brokers and mediators between business strategy and system are ambiguous and the clarity of the distribution of task
daily business (Shi et al., 2009). Thus, under normative conduction within such a system. According to Bliese and
conditions and a process-oriented understanding of Castro (2000), “role clarity has been explored in literally
PPM, the major phase for line manager engagement is hundreds of occupational stress studies” (p. 66). Nonetheless,
the resource management phase. we use role clarity as a trait of the management system. In
(3) Project portfolio managers. In addition to traditional line contrast with the clarity of a single managerial role, in the
managers, project portfolio managers have evolved as a current analysis, this clarity refers to the overall clarity across
relatively new managerial role. These managers are the roles of all internal stakeholders. Stakeholders are assumed
supposed to be critical in planning and controlling com- to be more effective when they understand what must be
plex project landscapes and implementing project port- accomplished, whereas role ambiguity appears to decrease
folio management practices (Jonas, 2010). The function performance (Hall, 2008; Tubre and Collins, 2000). In the
of project portfolio managers is to coordinate multiple PPM context, unclear roles could lead to unintended meddling
projects across projects within one organization and can in the project portfolio management process or to negative
be classified under the aforementioned middle manage- effects through well-intentioned but incorrect interventions.
ment. However, in terms of their specific objectives and Role clarity aims for both formal differentiated role de-
depending on their assigned responsibilities, project scriptions and actually practiced behavior, indicating whether
portfolio managers can either be primarily administrative each task is performed exclusively by the intended stakeholder.
personnel or be able to shape a company's future through This implies clear definitions of the objectives and authorities
their influence, or their role may fall somewhere in within the project portfolio management process. Thus, role
between (Blomquist and Müller, 2006). We define a clarity can be understood as an indicator of the overall degree
project portfolio manager as a centralized middle man- of PPM maturity.
agement coordination unit that supports senior managers
with its specialized knowledge regarding project portfolio 3. Hypotheses
practices (Dillard and Nissen, 2007). Under normative
conditions and with respect to the process-oriented We develop our hypotheses and the resulting model based
understanding of PPM, the major phase for the engage- on the insights that are discussed in the extant research. The
ment of project portfolio managers should be the third root idea builds on the concept of general stakeholder theory,
phase, the portfolio steering phase. which posits that stakeholders are critical for firm success, and
(4) Project managers. Project managers are the most obvious we transfer this idea to the realm of project portfolio
stakeholders and are doubtless perceived as crucial for management. The stakeholder definition in general stakeholder
project portfolios. Project managers are accountable for theory (e.g., Freeman et al., 2010) and the derived definition
their individual project success. Moreover, they represent for PPM imply that stakeholders can influence the success of
their team and internal or external project customers in a an organization and a project portfolio, respectively. This
portfolio (Anantatmula, 2008; Geoghegan and Dulewicz, influence can be related to the (potential) behavior of stake-
2008). Also on the portfolio level, issues such as handling holders. As a crucial and presumably the most fundamental
traditional resource conflicts between projects and aspect of stakeholder behavior literature describes the extent to
between line and project managers in matrix organiza- which stakeholders (potentially) engage themselves. Further,
tions remain typical challenges. As opposed to the other this intensity of stakeholders' engagement may vary between
three strategic internal stakeholders, project managers firms or portfolios (PMI, 2008a).
have no major phase of engagement in the PPM process. Therefore, we propose that the intensity of stakeholders'
In fact, project managers contribute to all three PPM engagement influences project portfolio success, whereas the
previously mentioned concept implies that a high intensity per discussion of role clarity, we argue that the effect of increased
se is not necessarily positive but its effect also depends on engagement depends on whether stakeholders know what they
other aspects such as, for example, supportiveness. For the are expected to do (formal differentiated role descriptions) and
previously defined internal key stakeholders, this proposal whether they actually do it (practiced behavior). Hence, we
translates into the following hypotheses. propose the following hypothesis:
H1a. Senior managers' intensity of engagement influences
H3. Role clarity moderates the effect of the intensity of en-
project portfolio success.
gagement of stakeholders on project portfolio success.
H1b. Line managers' intensity of engagement influences project
portfolio success. The overall research model with all hypotheses is summa-
rized in Fig. 1.
H1c. Project portfolio managers' intensity of engagement
influences project portfolio success.
4. Method
H1d. Project managers' intensity of engagement influences
project portfolio success. 4.1. Empirical sample
Although the extant research suggests that the overall To test our hypotheses, we use a cross-sectional sample of
intensity of engagement of one stakeholder influences project 197 project portfolios of firms in Germany, Austria, and
portfolio success (as stated in hypotheses H1a–H1d), one must Switzerland. Corresponding data were collected as part of a
consider that project portfolios and their management are more comprehensive survey to investigate different project
dynamic. During an organization's life cycle, the importance portfolio management issues. To ensure that the participants
of stakeholders varies at different stages because of their had a sufficient understanding of the object of the research;
varying potential of contribution and behavior (Aaltonen and exclusively, suchlike firms were contacted which run project
Kujala, 2010; Altinay and Miles, 2006; Jawahar and portfolios of at least 20 simultaneous projects. Moreover, the
McLaughlin, 2001, cited in Assudani and Kloppenborg, sample focuses on internally sponsored projects, such as IT and
2010). For the project portfolio management process, Levine R&D projects, which permit a high degree of freedom in
(2005) indicated that there are “right” phases in which each managing portfolios and cross-project optimizing.
stakeholder may engage and his or her engagement is Firms were contacted through a direct mailing to 1455
connected to a positive influence on the overall project managers, explaining the objectives, individual returns, and
portfolio management process. For example, it may be procedures of the study, to ensure that the sample size was
counterproductive if senior managers invest significant per- representative. Through follow-up interviews by phone with
sonal time in portfolio steering and accelerate selected projects interested managers it was verified that the potential in-
outside of the official prioritization processes and rules. formants fulfilled all participation requirements. In particular,
Therefore, increased stakeholder engagement can unfold its the adequacy of firms' project portfolio size and representa-
(positive) effect on success only if the higher engagement is tives' access to the required informants was validated. In each
also invested in the appropriate process phase. Therefore, we firm, two informants were approached—one senior manager
propose that the effect of the intensity of engagement of and one project portfolio manager from middle management.
stakeholders on success may differ for each PPM phase and for Senior management informants had to have decision-making
each stakeholder. Thus, we argue that a deeper analysis of the authority over the project portfolios (e.g., with respect to
influence of stakeholders' effect needs to be phase-specific. initiating, terminating, or delaying projects). Typically, these
In our role definitions, we normatively derived a major phase informants were chief executive officers, heads of business
for three of the four strategic internal stakeholders. Because high units, heads of divisions, or heads of R&D. Project portfolio
engagement of the respective stakeholders in the corresponding managers on the other hand were those informants who were
major phases represents the theoretically desired state, we expect expected to be operatively involved in project portfolio
that this will exert a positive influence on project portfolio management processes. These managers held various titles,
success. such as project portfolio coordinator/manager, head of project
H2a. Senior managers' intensity of engagement in the portfolio management office, or department manager. The multiple
structuring phase positively influences project portfolio success. informant design on two different management levels was
chosen to obtain a broader picture of the processes, information
H2b. Line managers' intensity of engagement in the resource flows, and responsibilities of the analyzed firms. Furthermore,
management phase positively influences project portfolio success. the chosen research design eliminates the problem of common
H2c. Project portfolio managers' intensity of engagement in method bias (Podsakoff et al., 2003) because the portfolio
the portfolio steering phase positively influences project manager informants assessed the engagement of stakeholders
portfolio success. within the project portfolio management processes, which trans-
lates into their intensity of engagement. The senior management
Hypotheses H2a–H2c focus on the extent to which stake- informants assessed the outcome variable project portfolio
holders engage in the respective phases. Based on the previous success.
[1]
H2(a)
Role clarity
Intensity of senior
managers’ engagement H1a
H3
[1]
H2(b)
Project portfolio success
Intensity of line managers’ H1b
engagement
Strategic fit
[1]
H2(c) Average project success
Intensity of project portfolio H1c

managers’ engagement
[1]
H1d
Intensity of project
managers’ engagement
[1] Phase: Portf olio structuring, Resource management, Portf olio steering
Fig. 1. Model for impact of intensity of engagement on success.
In total, 426 sufficiently completed questionnaires were each entailing a three-item scale (Hair et al., 2006). Both
submitted, which corresponds to a response rate of 29%. The constructs were assessed by the senior management in-
total of 426 surveys comprise 209 questionnaires from senior formants. All items were derived from conceptual articles in
management informants and 217 questionnaires from portfolio the literature or were directly based on existing scales.
manager informants, yielding 201 matched pairs. For our Following previous suggestions in the literature, we used dis-
analyses, we used only the sample of fully matched pairs and criminated measures for the project perspective and strategic fit
excluded surveys with missing values in our focal constructs. (Blomquist and Müller, 2006; Müller et al., 2008). Regarding
This resulted in a valid sample size of 197 matched pairs. The the (single) project level, we used a scale that addresses the
study includes one-third of the 100 largest corporations in average project performance over all projects within the
Germany, Austria, and Switzerland. Therefore, the sample can portfolio. This scale for the average project success (α = 0.73)
be considered a representative cross-section of medium-sized refers to the triple constraints of delivering projects according
and large firms. Portfolios' size averages with 129 projects and to specifications, on time, and within budget (Cooper and
an overall annual budget of €168 million. 34% of the firms Edgett, 2003; Engwall and Jerbrant, 2003; Lechler and Dvir,
have fewer than 500 employees, 27% employ 500 or more but 2010). Following the argumentation of Meskendahl (2010), we
less than 2000 employees, and 39% have more than 2000 used a strategic fit scale (α = 0.82) that covers the degree to
employees. Moreover, the sample has a reasonable spread which a portfolio reflects the overall strategy in terms of
across industries: automotive and machinery (23%), financial the alignment of project objectives and resource allocation
services (19%), electronics (12%), IT/telecommunications (Milosevic and Srivannaboon, 2006; Srivannaboon and
(11%), other services (17%), pharmaceuticals (6%), and others Milosevic, 2006). For all scales, reliability was assessed
(12%). After data processing, we conducted a conference to based on the calculated Cronbach's alphas and could be
discuss and validate our findings with nearly 100 experts from considered satisfactory, since literature discusses cut-off
62 firms that participated in our study. values for alpha coefficients between 0.7 and 0.8 (Hair et al.,
2006). To assess validity also a confirmatory factor analysis
4.2. Measurement (CFA) was conducted. Both variables had significant loadings
between 0.7 and 0.83, and the overall model fit was acceptable
4.2.1. Dependent variables (χ 2 = 19.02; df = 8; p b 0.02; SRMR = 0.038; CFI = 0.97). Av-
Project portfolio success was measured using two con- erage project success and strategic fit were correlated but
structs, average project success and a portfolio's strategic fit, distinct (r = 0.51).
4.2.2. Independent variables implement project portfolio management. Third, following the
Accounting for PPM being a distributed process with the same logic on the portfolio level, we included portfolio size as
interplay between stakeholders as a crucial factor, we included the natural logarithm of the overall number of projects in each
all relevant stakeholders in our regression analysis and portfolio. Fourth, we used an NPD dummy variable to indicate
accepted the increased complexity. Thus, we measured the whether a portfolio consisted of 50% or more research- and
intensity of engagement of each of the four stakeholders in NPD-driven projects (1) or not (0). New product development
each of the three PPM phases. Additionally, we measured role portfolios showed higher uncertainty and risk, which may have
clarity as an indicator of PPM maturity. To measure role clarity affected success. Finally, we included the degree of portfolio
within the project portfolios in our study, we developed an interdependencies. This control variable was measured as a
appropriate multi-item scale based on insights from the three-item scale that referred to the content-related interdepen-
literature review, our workshops, and questionnaire pre-tests. dencies between projects in the same portfolio (α = 0.80).
For our role clarity scale (α = 0.84), we specified three items Higher interdependencies could be negatively correlated with
that indicated the overall role clarity across all involved success as a result of more complex processes (Cusumano and
internal stakeholders. Nobeoka, 1998). Whereas market turbulence was assessed by
Because large-scale empirical research with project portfo- the senior management informants, portfolio manager in-
lios and stakeholders as units of analysis is scarce, we found no formants assessed the remaining control variables.
well-established scales that we could use to measure stake-
holder engagement with respect to our focal questions. 5. Results
Therefore, we developed a two-dimensional 6 × 9 question
matrix consisting of six items for the different stakeholders To test our hypotheses with respect to the two different
(board of directors/CEO, divisional head, department head, success measures, we used hierarchical ordinary least squares
project leader, multi-project coordinator, and project manage- (OLS) regression. To better understand the interactions
ment office) and nine items for the different managerial between the intensity of engagement and role clarity, we
activities in the project portfolio management process. graphically illustrate how role clarity influences the effects of
Thereby, each of the three phases of the PPM process was intensity of engagement using simple slopes.
represented by three activity items (portfolio structuring: 1—
strategic portfolio planning, 2—evaluation of projects, and 3— 5.1. Strategic fit dimension of project portfolio success
selection of projects; resource management: 4—cross-project
resource allocation planning, 5—individual allocation of em- Table 1 shows the results of the moderated hierarchical OLS
ployees to projects, and 6—release of project resources; portfolio regression with strategic fit as the dependent variable. In the first
steering: 7—controlling of the project portfolio, 8—monitoring step (model A), we include only control variables in the
of the strategic alignment of the portfolio, and 9—cross- regression model, which shows small significant negative effects
functional coordination of projects). We asked the portfolio for market turbulence (− 0.09, p b 0.05) and firm size (− 0.08,
manager informants to indicate who in their organizations are p b 0.05). In the second step (model B), we test for direct effects
primarily responsible for the nine chosen activities; multiple of our aggregated independent variables and the hypothesized
responses were allowed. For our analysis, we aggregated the moderator variable. Line managers show a significant direct
answers along the three PPM phases and four generic positive effect on strategic fit (0.10, p b 0.05), which supports
stakeholders (board of directors and division heads were H1b. However, we must reject hypotheses H1a, H1c, and H1d
subsumed as senior managers; multi-project coordinators and on this aggregation level. In the third step (model C) of
PMO were subsumed as project portfolio managers). We then breaking down all independent variables to the phase level,
transformed the counts into uniform scores between 1 and 7 to direct effects are even reduced, as our control variable for
ensure comparability with the Likert-type scales that were used market turbulence no longer has a significant influence on
for the other variables. In sum, this procedure led to twelve strategic fit. In the fourth and final step (model D), again on the
constructs that measure the extent or intensity of the engagement phase level, we eventually include two-way interactions. To
of each of the four stakeholders in each of the three PPM phases. ensure interpretable coefficients, we mean-center independent
and moderator variables before joining them into the
4.2.3. Controls interaction (Aiken and West, 1991). The overall model D is
To reflect portfolios' and firms' environment as well as significant (R 2 = 0.25, F = 2.15, p b 0.01) and will be the core of
characteristics, we included five control variables in our the following analysis.
analysis. First, we controlled for market turbulences during The unstandardized regression coefficients show several
the period of data collection during the 2009 financial and significant direct and interaction effects, whereas no control
economic crises. The respective construct (α = 0.82) comprised variable has significant influence. For the intensity of senior
three items regarding the actual effect of the crises on required managers' engagement in the structuring phase surprisingly
changes within portfolios. Second, the natural logarithm of the there is no effect, on the one hand. On the other hand, there can
firms' overall head count as a proxy for firm size was included be observed a positive effect of the interaction between the
in our analysis. Firm size may affect project portfolio success intensity of senior managers' engagement and role clarity in
because larger firms might have a greater capacity and need to the resource management phase (0.11, p b 0.05) and a negative
Table 1
Intensities of engagement influencing strategic fit.
Strategic fit as dependant variable a
Variables Model A Model B Model C Model D
Market turbulence − 0.09 ⁎ (0.04) − 0.08 ⁎ (0.04) − 0.08 (0.04) − 0.07 (0.04)
Firm size b − 0.08 ⁎ (0.03) − 0.08 ⁎ (0.03) − 0.08 ⁎ (0.04) − 0.06 (0.04)
Portfolio size b 0.00 (0.06) 0.01 (0.06) 0.02 (0.06) 0.01 (0.06)
R&D intensity 0.05 (0.14) 0.06 (0.16) 0.08 (0.15) 0.09 (0.15)
Portfolio interdependencies 0.03 (0.06) 0.03 (0.06) 0.02 (0.06) 0.00 (0.06)
Overall PPM process

Senior managers 0.01 (0.06)
Line managers 0.10 (0.05) ⁎
Project portfolio managers 0.07 (0.06)
Project managers 0.03 (0.07)
Portfolio structuring
Senior managers − 0.02 (0.06) − 0.02 (0.06)
Line managers 0.03 (0.04) 0.02 (0.04)
Project portfolio managers − 0.03 (0.08) − 0.09 (0.08)
Project managers 0.03 (0.07) 0.00 (0.07)
Resource management
Senior managers 0.04 (0.06) − 0.03 (0.06)
Line managers − 0.01 (0.04) − 0.04 (0.04)
Project portfolio managers 0.05 (0.08) 0.05 (0.08)
Portfolio steering
Senior managers 0.00 (0.06) 0.05 (0.06)
Line managers 0.09 (0.05) 0.13 ⁎ (0.05)
Project managers − 0.02 (0.06) 0.00 (0.06)
Role clarity 0.09 (0.05) 0.09 (0.05) 0.09 (0.06)
Senior managers × role clarity 0.03 (0.04)
Line managers × role clarity 0.05 (0.04)
Project portfolio managers × role clarity 0.16 ⁎⁎ (0.06)
Project managers × role clarity 0.05 (0.06)
Resource management
Senior managers × role clarity 0.11 ⁎ (0.05)
Line managers × role clarity 0.06 ⁎ (0.03)
Project portfolio managers × role clarity − 0.04 (0.06)
Project managers × role clarity − 0.05 (0.03)
Portfolio steering
Senior managers × role clarity − 0.14 ⁎⁎ (0.05)
Line managers × role clarity − 0.08 (0.05)
Constant 5.86 ⁎⁎⁎ (0.42) 4.80 ⁎⁎⁎ (0.57) 4.82 ⁎⁎⁎ (0.59) 4.79 ⁎⁎⁎ (0.57)
F 2.40 ⁎ 2.19 ⁎ 1.18 2.15 ⁎⁎
R2 0.06 0.10 0.13 0.25
Adjusted R2 0.03 0.05 0.05 0.11
Δ R2 0.04 0.07 0.12 ⁎
a
Unstandardized coefficients are given, with standard errors in parentheses.
b
Natural logarithm. n = 197.
⁎ p b .05.
⁎⁎ p b .01.
⁎⁎⁎ p b .001.
interaction effect in the portfolio steering phase (− 0.14, resource management and portfolio structuring within the PPM
p b 0.01). Hence, although hypotheses H1a in general and process. For resource management, Fig. 2 reveals that only at
H2a must be rejected, our results support H1a if limited to high role clarity there is a positive effect, and at low role clarity
6
5.5
5.5
Strategic Fit
5
5
4.5
4.5
4
4
3.5
3.5
1 2 3 4 5 6 7 1 2 3 4 5 6 7
Senior Mgr. Engagement (Resource Phase) Senior Mgr. Engagement (Steering Phase)
High Role Clarity High Role Clarity
Low Role Clarity Low Role Clarity
Fig. 2. Simple slopes—interaction effects of senior managers.
the effect becomes negative. In the portfolio steering phase, of engagement of line managers in the portfolio steering phase
there is a positive effect for low role clarity and a negative shows a direct positive effect on strategic fit (0.13, p b 0.05),
effect for high role clarity (also see Fig. 2). whereas the corresponding interaction effect is negative but
For line managers, the interaction between the intensity of not significant. Fig. 3 shows that for low role clarity, the
their engagement and role clarity shows a small significant engagement of line managers positively affects strategic fit,
positive effect for the resource management phase (0.06, whereas for high role clarity, the effect is significantly weaker
p b 0.05), and this result supports hypothesis H2b. The simple but still marginally positive.
slope in Fig. 3 reveals a negative effect for low role clarity and The intensity of engagement of project portfolio managers in
a positive effect for high role clarity. Furthermore, the intensity the structuring phase of PPM positively affects the strategic fit
6
6
5.5
5.5
Strategic Fit
Strategic Fit
5
5
4.5
4.5
4
1 2 3 4 5 6 7 1 2 3 4 5 6 7
Line Mgr. Engagement (Resource Phase) Line Mgr. Engagement (Steering Phase)
High Role Clarity High Role Clarity
Low Role Clarity Low Role Clarity
Fig. 3. Simple slopes—interaction effects of line managers.
6
5.5
Strategic Fit
5
4.5
4
3.5
1 2 3 4 5 6 7
Project Portfolio Mgrs. Engagement (Structuring Phase)
High Role Clarity Low Role Clarity
Fig. 4. Simple slopes—interaction effect of portfolio managers.
of a portfolio (0.16, p b 0.01). Fig. 4 shows that the effect on Surprisingly, this effect is negative (− 0.11, p b 0.05), and we must
strategic fit is positive only at high levels of role clarity and that therefore reject hypothesis H2b regarding average project success.
the effect is strongly negative at low levels of role clarity. Even more, because there are no further effects for the intensity of
Surprisingly, we must reject hypothesis H2c, as the engagement, we must also reject hypotheses H1a, H1b, H1c, and
regression does not show any significant effect for the intensity H1d for project managers as well as H2a and H2c. Finally, our
of engagement of project portfolio managers in the steering moderator variable role clarity shows a significant positive direct
phase. As proposed, our results support the notion that the effect on average project success (0.13, p b 0.05). Model D
intensity of engagement of each stakeholder has a different effect provides no additional explanatory value compared with model C,
on strategic fit (i.e., positive, negative to a different extent, or no as the delta-R 2 value is not significant. Thus, H3 must be rejected,
significant effect) for each PPM phase. The regression also and we use only the significant models B (R 2 = 0.15, F = 3.24,
includes non-significant coefficients and requires us to reject the p b 0.001) and C (R 2 = 0.19, F = 2.37, p b 0.01) to interpret the
general hypotheses H1a–H1d (in model D). results.
Although we must reject hypothesis H3 on a general level
because some of the moderated effects are not significant, the 6. Discussion
previously described results partially support hypothesis H3
for specific stakeholder-phase combinations. The objective of this study is to investigate the effect of the
engagement of strategic internal stakeholders in the different PPM
5.2. Average project success dimension of project portfolio phases on project portfolio success considering varying degrees of
success PPM maturity. The imperative for this detailed analysis is
underlined by examining average engagement over all phases
The results of the regression with average project success as the with average levels of role clarity. We found that only two
dependent variable are presented in Table 2. Models A, B, C, and stakeholders significantly influence project portfolio success. The
D are built according to the same logic as in the previous positive influence of line managers on strategic fit demonstrates
regression. Model A—which includes only the control variables— their function as an interface between strategy and operations (Shi
shows a small significant negative effect for firm size (− 0.09, et al., 2009). Moreover, line managers also provide the resources
p b 0.05) and a very strong negative effect for R&D intensity for projects in portfolios, provide functional knowledge as domain
(− 0.49, p b 0.05). In model B, which tests for the direct effects experts, must subsequently implement the results of such projects,
of the aggregated independent variables and moderator and possess the political power to support or oppose projects.
variable, the intensity of engagement of project managers Hence, the engagement of line managers on average supports the
shows a strong significant direct positive effect on average PPM process, and the absence of their engagement can constitute a
project success (0.22, p N 0.05); this finding supports H1d. In significant obstacle. The positive influence of project managers
model C, among the control variables, only R&D intensity on average project success is rather obvious, as they are
affects average project success (− 0.36, p b 0.05). Further, the responsible for running the projects in portfolios and represent
intensity of engagement of line managers in the resource their projects in the PPM process. Consequently, an increased
management phase significantly affects average project success. engagement in the PPM process (e.g., to obtain qualified
Table 2
Intensities of engagement influencing average project success.
Average project success as dependent variable a
Variables Model A Model B Model C Model D
Market turbulence − 0.03 (0.05) − 0.03 (0.05) − 0.03 (0.05) − 0.03 (0.05)
Firm size b − 0.09 ⁎ (0.04) − 0.08 ⁎ (0.04) − 0.07 (0.04) − 0.05 (0.04)
Portfolio size b 0.13 (0.07) 0.12 (0.07) 0.12 (0.07) 0.10 (0.07)
R&D intensity − 0.49 ⁎ (0.16) − 0.36 ⁎ (0.17) − 0.36 ⁎ (0.17) − 0.31 (0.17)
Portfolio interdependencies − 0.04 (0.07) − 0.03 (0.06) − 0.01 (0.07) − 0.03 (0.07)
Overall PPM process

Senior managers − 0.10 (0.07)
Line managers − 0.10 (0.05)
Project portfolio managers 0.01 (0.07)
Project managers 0.22 ⁎ (0.07)
Senior managers − 0.09 (0.06) − 0.08 (0.06)
Line managers 0.03 (0.05) 0.01 (0.05)
Project portfolio managers 0.02 (0.09) − 0.03 (0.09)
Resource management
Senior managers − 0.08 (0.06) − 0.11 (0.07)
Line managers − 0.11 ⁎ (0.04) − 0.13 ⁎⁎ (0.04)
Project portfolio managers 0.01 (0.09) − 0.02 (0.09)
Portfolio steering
Senior managers 0.08 (0.06) 0.08 (0.07)
Line managers − 0.04 (0.06) 0.01 (0.06)
Role clarity 0.11 (0.06) 0.13 ⁎ (0.06) 0.15 ⁎ (0.06)
Senior managers × role clarity − 0.03 (0.05)
Project portfolio managers × role clarity 0.11 (0.07)
Resource management
Senior managers × role clarity 0.03 (0.05)
Project portfolio managers × role clarity 0.10 (0.07)
Project managers × role clarity − 0.06 (0.04)
Portfolio steering
Senior managers × role clarity − 0.04 (0.06)
Line managers × role clarity − 0.03 (0.05)
Constant 5.32 ⁎⁎⁎ (0.47) 4.81 ⁎⁎⁎ (0.64) 4.67 ⁎⁎⁎ (0.65) 4.59 ⁎⁎⁎ (0.65)
F 3.33 ⁎⁎ 3.24 ⁎⁎⁎ 2.37 ⁎⁎ 2.09 ⁎⁎
R2 0.08 0.15 0.19 0.27
Adjusted R2 0.06 0.10 0.11 0.14
ΔR2 0.07 ⁎ 0.11 ⁎ 0.08
a
Unstandardized coefficients are given, with standard errors in parentheses.
b
Natural logarithm. n = 197.
⁎ p b .05.
⁎⁎ p b .01.
⁎⁎⁎ p b .001.
resources for their projects or to become aligned with other (1) Senior managers. A wide range of studies has shown a
project managers) positively affects the success of their positive effect of the engagement of senior managers on
projects. More differentiated findings will be discussed below. project success (e.g., Gomes et al., 2001; Swink et al.,
2006). In view of these findings, it is initially surprising (2) Line managers. Generally, line managers attempt to
that the engagement of senior managers has no significant optimize their sub-portfolio of projects that is predominantly
influence in their germane phase of portfolio structuring, relevant for their own department and its sub-strategy
especially in terms of strategic fit. According to the work of (Platje et al., 1994). Additionally, as resource owners,
Bonner et al. (2002) or Unger et al. (2012) on project they hold the greatest knowledge of resources. Given a
termination within PPM, senior managers' effect may be of situation lacking role clarity, immature PPM systems
an inverted U-shaped nature (see also Onyemah, 2008). provide line managers with opportunities to pursue their
This shape could be explained by the tendency of senior personal interests and act like manorial lords rather than
managers to mentor their “pet projects” (i.e., projects that servants of the overall PPM process who contribute to
are personally important to senior managers). Such the overall strategic fit. Higher role clarity regulates
mentoring may result in allocating more resources than opportunities for control and forces line managers to
are justifiable based on strategy or may result in pursue their formally defined interests in the portfolio
continuing to pursue failing projects (Biyalogorsky et context. Therefore, increasing role clarity causes this
al., 2006; Schmidt and Calantone, 2002). The so-called negative influence to disappear. The direct negative
“escalation of commitment” (Brockner, 1992; Staw, effect on average project success reflects the classical
1981) has not only been discussed as a factor that conflict between line organization and projects (Payne,
negatively affects success in general management and 1995).
new product development but also has been demonstrat- With respect to portfolio steering, line managers play a
ed as a success factor for projects and project termination crucial role as long as the PPM system is in a build-up
in the PPM process (Unger et al., 2012). In particular, the state with low to average maturity. The positive in-
termination of projects is strongly connected to the fluence on strategic fit may stem from the line managers'
recurring selection of projects in the portfolio structuring superior knowledge of their business and familiarity with
phase. the specifics of the environment in which projects run.
Our rationale is further supported in the resource Line managers know where problems can occur, know
management phase at low levels of role clarity when where attention and steering is needed most, and can
line managers are not fully clear with regard to their identify conflicts first—particularly within their own
responsibilities or do not actually fulfill their responsi- departments—given their experience, expertise, and func-
bilities. Then, senior managers can easily overrule line tion as resource owners. In contrast, project portfolio
managers and use the opportunity to promote their “pet managers with limited empowerment and expertise (in
projects” by privileging them in staffing. Senior man- immature PPM systems) may not know the specifics of
agers in PPM may overcome barriers of will through projects and may thus be able to steer on an overarching
their hierarchical potential, similar to the role of power level that may be rather general and potentially insufficient.
promotors in the innovation management literature Further, line managers can act as an interface between
(Gemünden, 1985; Gemünden et al., 2007; Hauschildt senior management strategy and operative project scope
and Kirchmann, 2001). With increasing role clarity, the during this build-up (Shi et al., 2009).
power of senior managers is channeled, and negative (3) Project portfolio managers. Surprisingly, the results do
effects are mitigated. not show a significant positive effect of the intensity of
As observed in the portfolio steering phase, this issue can engagement of project portfolio managers on strategic fit
worsen. When all stakeholders know and fulfill their or average project success. There may be two explana-
responsibilities, senior managers' meddling and micro- tions, as PPM is still new in many firms and is not yet a
management in portfolio steering negatively affect PPM fully established management system. First, even with
success (Bonner et al., 2002). The rationale for this increasing role clarity, some project portfolio managers
observation becomes clear when we consider that the may still have problems with their new role because they
engagement of senior managers in portfolio steering is lack the required qualifications, knowledge, and experi-
not part of their formally defined key responsibilities ence. Second, in the firms in our sample, roles may have
(except final decisions on project termination) but not yet been defined in a manner that renders them
actually conflicts with the role of project portfolio significantly beneficial to the PPM process.
managers. Further, portfolio steering is an operative
rather than strategic task; therefore, it is not assumed to The core responsibilities of project portfolio managers in the
be a core competence of senior managers, especially PPM process are more operational in nature, and they should not
compared with project portfolio managers. Only in serve as visionaries focusing on strategy. However, they must not
immature PPM systems with low role clarity can the be pure administrators who solely focus on data and operations.
interventions of senior managers be understood as Rather, project portfolio managers need both a strategic
supportively compensating for the lack of role clarity orientation (i.e., understanding and buying in to portfolio
among the more operative stakeholders, particularly strategy) and operational transparency (i.e., collecting and
project portfolio managers, and not properly defined analyzing relevant information) to be able to steer project
roles regarding PPM needs. portfolios successfully. Generating transparency and steering
portfolios are rather operational tasks, where respective compe- increasing transparency. Moreover, with increasing operational
tences can be developed. A strategic orientation can be viewed tasks and decreasing strategic content from portfolio structuring
rather as a necessary requirement to enable project portfolio to steering, senior managers should reduce their engagement
managers to steer a portfolio successfully. Hence, our results and delegate to line and project portfolio managers. Thus,
show that involving project portfolio managers in portfolio senior managers avoid over-steering and micro-management by
structuring can be beneficial to generate the necessary strategic choosing an appropriate management style, which is crucial for
understanding and buy-in and thus enable them to successfully successful PPM (Fricke and Shenhar, 2000). In parallel, senior
perform their major task of portfolio steering. Further, these managers must further build up, strengthen, and enforce the
managers can also provide relevant information for portfolio PPM system; specifically, they must enable and empower
structuring (Raes et al., 2011). However, we also observe that this project portfolio managers. It is not only senior managers'
approach applies only in situations of very high role clarity. On responsibility to ensure the basic conditions for a functioning
the contrary, in immature PPM systems in which project portfolio PPM process besides their tasks within the process, but due to
managers may not know or completely fulfill their formal PPM their institutional power they also have the ability and authority
responsibilities, their engagement in portfolio structuring nega- to enact PPM rules and processes and to enforce their effective
tively affects strategic fit. This can be further explained by their application (Chakrabarti, 1974). This means specifically to
more operational and less strategic mindset as well as their lack of make transparent and clear formal role descriptions to all
overall business knowledge. stakeholders and ensure that all stakeholders fulfill their
In summary, this study contributes to both PPM and responsibilities and obey defined rules and processes. Other-
stakeholder literature. For PPM, this study shows the dif- wise, for example, senior managers may drown in firefighting
ferential effect of stakeholder engagement on portfolio in portfolio steering and therefore lack time to invest in
success. Stakeholder theory is enhanced by integrating effective portfolio structuring and resource allocation. Addi-
different contributions within stakeholder theory, testing the tionally, line managers may take advantage of their broker role
theory with empirical data, and applying the theory to the and follow their tendency to optimize their sub-portfolios at the
context of PPM. For example, in our study, one model cost of reduced portfolio success.
integrates the notion of different degrees of activity as reflected Line managers can also provide support in phases other than
in Mitchell et al.'s (1997) degrees of salience and described by their major phase, particularly during the build-up of PPM
Rowley and Moldoveanu (2003), with the network view of systems. During the transition, when responsibilities are being
Rowley (1997) and the work of Neville and Menguc (2006), transferred to project portfolio managers but role clarity
who emphasized interactions between stakeholders. Our work remains relatively low, line managers can bridge a potential
strengthens the relatively weak basis of empirical work on power and competence vacuum in portfolio steering and thus
stakeholder behavior and stakeholders' effect on success. contribute to PPM success. However, in turn, it is crucial for
Thereby, our research enhances the contributions, that have these managers to significantly reduce their engagement in
been offered with respect to the influence of specific stake- portfolio steering when PPM is further established. For their
holders on success, particularly senior management involve- major phase (i.e., resource management), line managers should
ment (e.g., Unger et al., 2012), to a larger group of key demand and support an increase in role clarity, including
stakeholders. Overall, our work addresses the fact and obeying defined processes and refraining from pursuing their
weakness of stakeholder theory: many theorizing efforts have departmental interests but rather balancing them with over-
been made, but only a few empirical studies have been arching PPM goals. Additionally, the latter must be enforced
presented to date (Freeman and McVea, 2001). This study through the increased monitoring of line manager decisions
shows that stakeholder engagement affects performance only through, for example, mutual control among line managers,
in environments with sufficiently defined roles and responsi- frequent steering committees with senior managers, and
bilities. In firms with low PPM maturity and unclear roles, challenging decisions by senior managers.
stakeholder engagement may be misguided. Project portfolio managers must actively demand that
required competences for their relatively new role are built up
6.1. Managerial implications and that they receive training, for example. Further, by building
on their hub position and connected observation potential,
From our results, we derive guidance for senior, line, and project portfolio managers should continuously ensure trans-
project portfolio managers. parency for senior managers with respect to discrepancies
Senior managers should adapt the intensity of their between current and targeted PPM processes and identify
engagement to the requirements in each phase of PPM. This potential levers for improvement. Thus, deficits in PPM
means specifically to focus on senior managers' major phase maturity become more transparent to senior managers, and
(i.e., portfolio structuring by definition) and also to accompany project portfolio managers can assist in establish their role and
the further process ensuring that objectively most important the overall PPM system, contributing to project portfolio
projects are assigned the key resources. However, while success.
focusing on portfolio structuring and aiming for PPM success, In summary, our findings suggest that the average level of
senior managers should ensure that “pet projects” do not persist PPM maturity that was observed is insufficient with respect to
through, for example, process definitions, objective criteria and project portfolio success. In particular, senior managers must
increase their efforts to further improve role clarity and pro- Items for strategic fit (SF)
fessionalize PPM.
SF 1: Our project portfolio is consistently oriented toward the
6.2. Limitations and future research firm's future.
SF 2: The corporate strategy is implemented in the optimal
As in every empirical study, this study has certain limitations way.
that must be considered when interpreting the results. Although SF 3: The allocation of resources to projects reflects our
we use a sample of firms from diverse industries and the sample strategic objectives.
size is satisfactory, the specific characteristics of the participating
firms might not represent all firms. In particular, the sample
Items for controls (MT—market turbulence, PI—portfolio
consists only of medium to large firms. Thus, the results may not
interdependencies)
be directly applicable to small firms, in which stakeholder
communication may be easier, more direct, and less complex.
Furthermore, we gathered our data in German-speaking MT 1: The economic crisis makes a reorientation of our project
countries (Germany, Austria, and Switzerland) among firms portfolio necessary.
that already apply project portfolio management. Hence, the MT 2: Due to the economic crisis we must reduce our
ability to generalize the results is limited to larger and more expenditures for projects substantially.
project-oriented firms in these countries. MT 3: The economic crisis does not have an impact on our
By concentrating on the project portfolio management process project portfolio. (inverted item)
and stakeholder interactions, we first focused on the intensity of PI 1: A high degree of alignment between our projects is
their engagement. Further research could extend this effort by required with respect to the scopes.
analyzing the quality of stakeholder engagement, for example, in PI 2: Scope changes of individual projects inevitably impact
the sense of supportiveness (McElroy and Mills, 2007) with on the execution of other projects.
respect to the goals of PPM phases or the PPM process as a whole. PI 3: Often projects can only be continued if the concrete
Second, we did not explicitly consider the competencies held results of other projects are known.
by the managers involved. Although it can be assumed that with
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Behavior of Internal Stakeholders in Project Portfolio Management and Its Impact On Success

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JPMA-01472; No of Pages 17

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International Journal of Project Management xx (2013) xxx – xxx

Behavior of internal stakeholders in project portfolio management and its

1. Introduction Both research and practice suggest that stakeholders with

Intensity of project portfolio H1c

Fig. 1. Model for impact of intensity of engagement on success.

Overall PPM process

Fig. 2. Simple slopes—interaction effects of senior managers.

Fig. 3. Simple slopes—interaction effects of line managers.

High Role Clarity Low Role Clarity

Fig. 4. Simple slopes—interaction effect of portfolio managers.

Overall PPM process

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