INTERNATIONAL JOURNAL OF

PROJECT
MANAGEMENT
International Journal of Project Management 23 (2005) 343–353
www.elsevier.com/locate/ijproman

What is project business?

a,* b,c
Karlos A. Artto , Kim Wikström
a
Helsinki University of Technology (HUT), Industrial Management, P.O. Box 5500, FI-02015 HUT, Finland
b
Åbo Akademi University, Industrial Management, Biskopsgatan 8, FI-20500, Åbo, Finland
c
PBI – Research Institute for Project-Based Industry, Slottsgatan 10, FIN-20100 Åbo, Finland

Received 1 June 2004; accepted 22 February 2005

Abstract

This article defines project business and employs a bibliometric study for considering the relevant characteristics of this concept.
The motivation for this study is the shallow definition of project business in contemporary project studies. Furthermore, there is no
overview on such relevant academic business sources that the project business concept would be built on. The research methodology
utilises a bibliometric study of the most cited business journals. The bibliometric study results in key sources that can be considered
as one scientific foundation for project business. However, this research goes beyond an ordinary bibliometric study, as the key
sources were read and their content was carefully analysed. In this analysis, we constructed eleven article clusters, whilst simulta-
neously building up an understanding of the interrelatedness between articles and article clusters. The analysis results in seven find-
ings that explore project business. The findings indicate that there is a need for several theoretical foundations: organisation theory,
innovation theories, sociological and psychometric theories. Furthermore, in the future, there may be a need for a stronger body of
strategy research. The analysis results in a definition of project business. According to this definition, the unit of analysis is a firm
rather than a project. The firm and its business are in a focal role, whereas projects may be secondary. The findings, project business
definition, and related reasoning contribute to new knowledge about the characteristics of project business. This knowledge is also
relevant for further theory building and for developing novel managerial applications in business.
Ó 2005 Elsevier Ltd and IPMA. All rights reserved.

Keywords: Project business; Project; Business; Firm

1. Introduction contexts where projects are conducted. Such project

contexts can be considered to be representative for dif-
Both project and business are important concepts. ferent businesses. This aspect brings businesses and pro-
When these concepts are brought together, the following jects together. Furthermore, MorrisÕ study introduces
questions will become relevant: What is the role of pro- different relevant lines of research that contribute to
jects in undertaking business? and: What is the role of the understanding of the interrelated roles of projects
business in undertaking projects? and business. When modern project management began
MorrisÕ [1] analysis on the evolution of project man- to develop, it was the efficiency rather than the effective-
agement provides an excellent understanding of different ness paradigm that was prevalent. Projects were used in
manufacturing for seeking improved coordination. In
*
the beginning, the managerial discipline relied mostly
Corresponding author. Tel.: +358-9-4514751; fax: +358-9-4513665 on administrative schemes related to purchasing and
(K.A. Artto), Tel.: +358-2-2154850; fax: +358 2 2154791 (K.
Wikström).
coordinating timely interdependencies in projects and
E-mail addresses: karlos.artto@hut.fi (K.A. Artto), kim.wikstrom between individual projects. In todayÕs project manage-
@abo.fi (K. Wikström). ment literature, projects are brought to a more strategic

0263-7863/$30.00 Ó 2005 Elsevier Ltd and IPMA. All rights reserved.

doi:10.1016/j.ijproman.2005.03.005
344 K.A. Artto, K. Wikström / International Journal of Project Management 23 (2005) 343–353

context where dependent or independent multiple pro- the 19th century to activities or interests. Since then, it
jects contribute to the fulfilment of strategic objectives has shifted towards referring to activities of an individ-
in the entire business system [2–6]. ual commercial firm. This again links the concept of
The term project business is discussed by Cova and business to the theory of the firm. The theory of the firm
Holstius [7] from a project marketing perspective. They was, in the mid-20th century, dominated by a general
recognise the difference in project business compared to economist view. Later, the focus has shifted towards
traditional trade. The article of Skaates and Tikkanen looking into particular issues such as processes, organi-
[8] reviews the contributions of project marketing, sation, decision-making, and information flows within
emphasising the connection between the business rela- the firm context. In general, business is considered as
tionships of individual projects and the wider environ- an establishment for performing economic activities:
ment in which these projects take place. The recent businesses exist to produce profit. In this article, how-
project portfolio management research line addresses ever, our basic assumption is that also non-profit organ-
the strategic management of multiple projects in busi- isations conduct business. In the case of non-profit
ness [9–14]. This line comes from a product development organisations, the ultimate objective of financial return
context, having its theoretical background in the fields is replaced by business objectives that relate to multifac-
of corporate investments and corporate finance. Also eted benefits produced for various stakeholders. The
criticism exists, with arguments that the management complexity of business is further emphasised by perspec-
of projects is still too rigid and emphasises the origi- tives where firms doing business are seen as coalitions of
nal-work, coordination-oriented project management multiple, conflicting interests where rules and standards
view rather than a strategic-change business perspective provide a degree of bounded rationality [29].
[15]. This implies that current management approaches Project business is contextually linked with the busi-
may not give enough recognition to the business context ness environment. It is obvious that project business
of projects, such as the strategic, business cycle, or R&D evolves not only from the traditional project manage-
[15]. Strategy is important for any business. The variety ment discipline. A more natural assumption is that gen-
of attempts to express the specific nature of a strategy eral management science may include more relevant
has lead different authors to create different strategic research that contributes to the business thinking related
schools. One important perspective, focusing on how to firms and their projects. Thus, concerning the method-
strategy is managed, is the process view to strategy, ology for contributing to new knowledge in this study,
comprising both strategy formulation and implementa- we focus on searching business rather than project
tion [16–25]. Strategy researchers have included projects literature.
and projectification in their fields of interest as part of
strategy formulation and implementation [26]. Also
complex product systems and their characteristics have 2. Point of departure for bibliometric study
been extensively researched [27]. The article by Söderl-
und [28] reviews recent articles on projects and project As our project business related interest is in pro-
management published in scientific management and jects that serve as vehicles for business, we decided
organisation journals, and articles in the International to search for the essential characteristics of project
Journal of Project Management. SöderlundÕs article business from highly regarded academic literature with
establishes an overview on research on different combi- true business content. For such true business content,
nations of single-project and multi-project contexts, we selected established and most cited journals that
and single-firm and multi-firm contexts. SöderlundÕs cover aspects of a firmÕs business in the areas of man-
conclusion is that the contexts of multi-projects and agement, organisation, strategy and innovation. We
multi-firms are significant for the future of project re- selected the following journals as a point of departure
search and for practical applications. for our search: Academy of Management Journal,
The objective of this article is to provide a definition Academy of Management Review, Administrative Sci-
of project business and to introduce its relevant charac- ence Quarterly, Strategic Management Journal, British
teristics. Existing studies do not provide a profound def- Journal of Management, IEEE Transactions on Engi-
inition of this important concept. Furthermore, the neering Management, Journal of Management, Jour-
current knowledge does not cover extensive overviews nal of Management Studies, Journal of Product
on sources which would lay a proper foundation for Innovation Management, Management Science, Orga-
the project business concept. This study aims also at nization Science, Organization Studies, Research Pol-
providing key sources that would lay a proper founda- icy, R&D Management, Research Technology
tion for the project business analysis. As the business is- Management, International Journal of Technology
sue is definitely the interesting part of project business, Management, Academy of Management Executive,
we consider briefly the business part of the concept in Harvard Business Review, and California Manage-
the following. The term business referred originally in ment Review.
 K.A. Artto, K. Wikström / International Journal of Project Management 23 (2005) 343–353 345

In the initial phase, the search was made from ISI cles that included the mere word ÔprojectÕ in their title,
Web of Science for all articles (see [30]) published during abstract or keywords section. We found 926 such Ôpro-
1986–2004 in those journals. The preliminary search by jectÕ articles in these journals from ISI Web of Science,
the term Ôproject businessÕ resulted in two hits [31,32]. published during 1986–2004. The number of these 926
There were no hits with the following search terms: pro- [citing] articles by publication year is shown in Fig. 1.
ject-based business, project based business, project-ori- As we did the database search in early autumn, 2004,
ented business, project oriented business, project-based the number of citing articles for the year 2004 does rep-
management, and project based management. As the re- resent only those articles accumulated to the database at
sults of these searches were not satisfactory, we ignored that point of time. The total number of source references
the results of these searches and adopted another strat- of these 926 citing articles was 45,307. This number
egy described in the following. (45,307) was obtained by simply summing up all source
references from the list of references of the 926 citing
articles. However, as the referenced sources include
3. Procedure and data for bibliometric study many same sources cited from several of the 926 citing
articles, the total number of different (referred) articles
We used the journals listed above to start with our was only 3863.
bibliometric study. The journals themselves represent In our analysis, we are interested in finding key
what we consider essential business content. For the sources and origins of project business, or, ÔprojectsÕ
ÔprojectÕ dimension in these journals, we searched arti- and ÔbusinessÕ. This justifies our approach not to analyse

Number of citing 'project' articles

120
Number of 'project' articles

102
100 87 89
78
80 73
65 67
61
56
60 46
52
40
40 33
26
20 9 11 11 8 11

0
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Year

Fig. 1. Number of citing ÔprojectÕ articles by publication year.

Fig. 2. Referred articles with minimum of 25 citations from citing articles.

346 K.A. Artto, K. Wikström / International Journal of Project Management 23 (2005) 343–353

the 926 citing articles that may be considered as more received 25 citations. There are altogether 1621 citations
contemporary, but rather to analyse the 3863 referred to the 42 key sources. Fig. 3 shows the number of the
articles. This is for identifying the important references, 1621 citations by citing year.
their relevant contents, and their potential interrelated- Fig. 4 shows the 1621 citations as allocated to five-
ness. Fig. 2 shows those 42 referred articles of the 3863, year intervals of publishing years of the referred articles.
which received a minimum of 25 citations from the 926 This way, Fig. 4 highlights the years of publication of
citing articles. In the figure, a circle depicts each referred important key sources. The peak in the early 1990s –
article, and the area of each circle is proportional to the and around it – is mostly due to several publications
number of citations received. A line connecting two cir- addressing the product development and innovation
cles [referred articles] indicates that the two articles are area. This reflects the paradigm shift towards seeking
referred to from one same citing article. The thicker the effectiveness and efficiency from technological develop-
line the more are the citing articles that cite to the two re- ment through enhanced R&D activities. Another simul-
ferred articles. The methodology used for this analysis is taneous rather significant line of research in the key
the following. The searched articles are imported from sources at that time is organisational knowledge and
ISI Web of Science to SITKIS software [33] that prepares learning. Concerning the early key sources in the 1950s
the data for the UCINET network analysis program [34] and 1960s indicated by Fig. 4, it seems that early orga-
and for desktop office programs for further analyses. nisation theory books built an important foundation.
Fig. 2 is produced by UCINET. Such organisation theory books at that time are March
The 42 referred articles in Fig. 2 represent key sources 1958 [68] with 27 citations, Thompson 1967 [41] with 49
that are a focal point in our analysis. The 42 referred citations, and Lawrence and Lorsch 1967 [63] with 29
articles are listed in the references of this paper, from citations. Burns and Stalker 1961 [59] with 34 citations
[35–76]. The articles are arranged in order of impor- represent early innovation management research already
tance, in terms of the number of citations received. at that time, and Glaser and Strauss 1967 [55] with 36
For example, the book by Clark and Fujimoto [35] re- citations focuses on grounded theory building approach
ceived 104 citations, while the article by Crawford [76] for sociological theory building.

Number of citations to referred articles by citing year

200
177 172
180
Total number of citations

162 161
160 141 144
137
140
117
120 105
100 88
82
80
60
37 37
40 26
20 6 7 9 10
3
0
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Year

Fig. 3. Citations to referred articles by the citing year of citing articles.

Number of citations allocated to the publication year of

referred articles
Total number of

800
citations

600
400
200
0
1955- 1960- 1965- 1970- 1975- 1980- 1985- 1990- 1995-
1959 1964 1969 1974 1979 1984 1989 1994 1997
Year

Fig. 4. Citations to referred articles by publication year of referred articles.

 K.A. Artto, K. Wikström / International Journal of Project Management 23 (2005) 343–353 347

4. Analysis of key sources relevant aspect in all papers: the project must be man-
aged by external factors such as characteristics of the
In fact, we did not obtain much from trying to under- product and competitive environment. This way, the pa-
stand the potential clusters of publications, their interre- pers departed from the traditional aspect of considering
lations, and respective implications from the pure the management of projects to be characterised by ra-
bibliometric data with various numerical and graphical tional task planning approaches. The sources in this
illustrations from our databases (Fig. 2 is one example cluster are published between 1984 and 1995, with most
of such illustration). Instead, we analysed the 42 referred studies published in early 1990s. However, the innova-
articles – or key sources – by reading them through, by tion success factors and failure factors study by Roth-
simultaneously writing qualitative analyses for each arti- well et al. 1974 [42] is the only exception that departs
cle. When doing so, we ended up forming eleven article from this time window. Furthermore, the Rothwell
clusters by the themes, topical contents, and the ap- et al. study is a critical and thorough study that employs
proaches of the articles. After forming the clusters, we a paired comparison research technique for the empiri-
categorised the clusters into three areas. The three areas cal study. In this respect, Rothwell et al.Õs study resem-
represent clusters with process, organisation, and tech- bles the study reported by Lawrence and Lorsch [63] in
nological and sociological change issues. The clusters cluster no. 6. The results of these two studies are rather
and areas are shown in Table 1, and each cluster is similar in many respects, despite different terminology
briefly analysed in the following. In describing the clus- and concepts. In addition, Rothwell et al. [42] emphasise
ters, references to the sources belonging to each cluster the user need.
are listed in order of descending number of citations in
the beginning of the cluster description. 4.2. Accelerating new product development

4.1. Product development success and process The sources in this cluster are [45,46,51,60,66,72,76].
The articles in this cluster focus on shortening the prod-
The sources in this cluster are [37,39,42–44,54, uct development cycle, mostly for technology-based
57,58,67,75]. This cluster includes studies that mostly firms. EisenhardtÕs [46] paper from 1995 also emphasises
focus on success factors and the related features of activ- adaptiveness by expanding from the rational process
ities/processes in a firm to enhance successful manage- thinking towards environment-dependency. Eisen-
ment of new product development. Six studies are hardtÕs paper also shows differences of effective ap-
rather focused upon the success factors of new product proaches, depending on the maturity of the industrial
development. Two publications introduce what they call segment.
third-generation new product development (NPD) pro-
cesses, or novel NPD processes [39,58]. One paper 4.3. Manufacturing performance, and development in
emphasises metrics and measurement [67]. Although five industry
success factor studies recognise the factors as determi-
nants for also unsuccessful outcomes, only one success This cluster includes only two sources [35,74]. The
factor study focuses in a rather explicit way also on fail- publications in this cluster adopt a viewpoint of strategic
ure factors [42]. One paper referred especially to product development of manufacturing in entire industries to-
rather than project success [44], thus emphasising the wards what can be considered as a new paradigm. The

Table 1
Article clusters for key sources
Area Cluster number Cluster title Number of sources Total number
in the cluster of citations
Process 1 Product development success and process 10 402
2 Accelerating new product development 7 236
3 Manufacturing performance, and development in industry 2 130
4 Organising for R&D and comprehensive management approaches 2 119
5 Multi-project management 1 26
Organization 6 Organisation theory and organisational design 5 188
7 Organisational knowledge accumulation, transfer, and learning 5 175
8 Marketing–R&D interface 3 108
9 Inter-organisational collaboration 3 106
Technological and 10 Sociological and psychometric theories, and theory building 2 71
sociological change 11 Technological and economic change 2 61
348 K.A. Artto, K. Wikström / International Journal of Project Management 23 (2005) 343–353

Clark and Fujimoto book [35] from 1991 received high- early Ôportfolio managementÕ study, with some emphasis
est rank due to its 104 citations. The book is about the also on single project management integration to upper
development of products in the world automobile indus- level management, and vice versa. Of course, manage-
try, with several comparisons between the USA, Europe ment of multiple projects is discussed in other sources
and Japan. The book adopts a strategic view by looking in other clusters, for instance, with the aggregate project
at product development performance in the industrial plan theme of Wheelwright and Clark 1992 [36] in clus-
context of a whole industry, and organising for lead ter no. 4. However, the Liberatore and Titus study was
times, productivity and quality. The book also discusses the only one that is focused on this theme only.
the importance of project strategy, which departs from
traditional project management towards a more busi- 4.6. Organisation theory and organisational design
ness-orientated view. The book by Hayes, Wheelwright
and Clark [74] from 1988 is about a new manufacturing The sources in this cluster are [41,47,48,63,68].
paradigm i.e., about matching manufacturing to new Excepting one article from the 1990s, all publications
contemporary performance requirements. However, in this category are organisation theory books from
the role of projects in this book is not extensive: projects 1950s, 1960s and 1970s. ThompsonÕs book [41] of 1967
are discussed briefly as developmental schemes, by con- adopts an open-system approach for understanding an
centrating on the challenges of organising projects organisationsÕ activities; uncertainty is an important
across the functions and activities of the manufacturing concept. GalbraithÕs book [41] of 1973 focuses on matrix
organization. structures; organisations are considered as information-
processing networks, where uncertainty is a major deter-
4.4. Organising for R&D and comprehensive management minant for organising information processing and orga-
approaches nisation structure. The paper of Henderson and Clark
[48] from 1990 focuses on architectural innovation with
This cluster also includes only two sources [36,53]. an integrating view between organisation, product, and
The books in this cluster represented an exceptionally knowledge. The book of Lawrence and Lorsch from
comprehensive management approach and/or mature 1967 focuses on environment dependency in organising.
and critical analysis on how managing R&D in organi- The basic message is that there is not one single best way
sations could be conducted. Wheelwright and Clark to manage and organise in all situations, and there must
1992 report that the book is built on seven years of be fit between an organisation and its environment. Dif-
extensive research conducted by the authors and Sou- ferent states of differentiation and integration in organ-
derÕs book of 1987 is built on a basis of a ten-year re- isational systems are important for different ways of
search period. The Wheelwright and Clark book [36] organising. Lawrence and Lorsch [63] suggest contin-
from 1992 had a second rank out of all by 82 received gency theory. This study resembles Rothwell et al.Õs
citations. The focus is on the development of new prod- [42] study in cluster no. 1. MarchÕs book of 1958 is about
ucts and processes in a firm. The aggregate project plan the theory of formal organisations. The focus is on deci-
approach emphasises the simultaneous strategic man- sions and information flows rather than hierarchy [68].
agement of multiple different projects and project types.
The link between strategy and development projects is 4.7. Organisational knowledge accumulation, transfer,
an important issue. Furthermore, organising issues of and learning
teams (authority, responsibility, roles) are analysed,
and the concept of project strategy is introduced. The The sources in this cluster are [38,52,62,64,73]. These
project strategy was also discussed in [35] in cluster studies include sociological study on knowledge flow
no. 3. SouderÕs book of 1987 introduces various impor- and communication networks [38], R&DÕs contribution
tant aspects on organising for and managing new prod- to knowledge and capacity/competence [52], learning
uct innovations in firms. The book provides conceptual and knowledge transfer [62], internal knowledge sharing
and practical organisational managerial schemes with an and learning schemes in product innovation [64], and
understanding of the effectiveness of these in different Japanese approach to NPD organising and learning [73].
environments and situations [53].
4.8. Marketing–R&D interface
4.5. Multi-project management
The three papers in this cluster suggest the need for
The Liberatore and Titus study [71] from 1983 is the greater marketing orientation [49], analyse the marketing
only study in this cluster. The study analyses R&D multi- and R&D interface by using a causal map that illustrates
project decision making in firms, and the impact of the integrative factors/activities between these func-
quantitative decision-making/selection and project man- tions [50], and introduce a nomological network that
agement techniques. Indeed, this can be considered as an illustrates the integrative mechanisms and information
 K.A. Artto, K. Wikström / International Journal of Project Management 23 (2005) 343–353 349

transfer mechanisms between marketing and R&D sociology and to social anthropology. The book of Nel-
functions [65]. son and Winter [69] of 1982 represents an organisation-
theoretic viewpoint for addressing processes of long-run
4.9. Inter-organisational collaboration economic development. Technological change is one key
driving force in this. The book employs an evolutionary
The three papers in this cluster are [40,61,70]. The theory approach. Skills as an evolutionary issue are dis-
Eisenhardt 1989 paper [40] provides an analysis of cussed by unfolding the themes of skills as programs,
agency theory, and its application to inter-organisational skills and tacit knowing, skills and choices, the uses of
activities, collaboration and contractual settings. The skill names, ambiguity of scope, and the skills of the
principal recommendation is to incorporate an agency businessman. Organisational capabilities and behaviour
perspective in studies of the many problems having a discussion includes the following themes: routine as
cooperative structure. There is support for agency the- organisational memory; routine as truce; routine as tar-
ory, linking contract form with information systems, get (control, replication, contraction, and imitation);
outcome uncertainty, incentives, and risk. EisenhardtÕs routines and skills as parallels; optimal routines and
study relates also to the theme or organisational theory optimisation routines; routines, heuristics, and innova-
of cluster no. 6. Ancona and CaldwellÕs paper [61] from tion; and routines and genes.
1992 analyses new-product teamsÕ external communica-
tion and vertical and horizontal communication in
high-technology companies. The Katz paper [70] from 5. Conclusions – What is project business?
1982 analyses R&D project teamsÕ communication
behaviours by the tenure composition of project groups. Our analysis strengthens the view that projects are
part of overall business and a central part of the devel-
4.10. Sociological and psychometric theories, and theory opment, strategic sight and maintaining of the firmÕs
building competitiveness. Our key source analysis of 42 key
sources and 11 clusters ended up with seven main find-
The Glaser and Strauss book from 1967 introduces a ings (a)–(g). The findings are summarised in Table 2.
sociological theory building perspective. It emphasises In the table, and in the following reasoning, the findings
theory building by using a grounded theory approach are analysed in terms of their scientific and managerial
for generating theory from qualitative data. Grounded implications.
theory is considered as a process of comparative analy- (a) The dominant role of R&D. The R&D and innova-
sis, rather than positioning the theory building on logi- tion context was dominant in our analysis. A large part
cal deduction from a priori assumptions [55]. The of the discussion in the key sources related to various
psychometric theory book of Nunnally and Bernstein R&D related business processes. Some studies provided
from 1978 is a comprehensive text on measurement insight on successful product structures for meeting
problems in psychology and in areas of business. The market needs. Our conclusion is that innovation man-
broad areas covered are scaling and classification [56]. agement is an important theoretical body of knowledge.
From the practical application viewpoint, we conclude
4.11. Technological and economic change that project business in industry may be focused on busi-
ness renewal.
The two books in this technological and economic (b) No operations management content. There were
change cluster relate to the organisational theory cluster no sources that would have discussed projects as man-
no. 4 and sociological and psychometric theory-building ufacturing vehicles in a firmÕs production line. Thus,
cluster no. 10. The book of Burns and Stalker [59] from the conclusion is that established and most cited busi-
1961 analyses the technological change and organisa- ness journals do not use sources with project delivery
tional issues of a company that relates to the technolog- business content. This may also indicate that projec-
ical system supporting and being supported by industry. tised deliveries of systems, problem solving, consul-
Furthermore, the book analyses the adaptation of rela- tancy, or services, do not have a significant role in
tionships between individuals towards the requirements industry. We conclude that articles employing scientific
of the technical and commercial tasks of the firm. Or- knowledge on project delivery business are presented
ganic systems are those, which are best adapted to con- elsewhere. To our knowledge, such other publications
ditions of change. The book discusses management are operations management, logistics and supply chain
structures and systems, organisation as an interpretive management, project management, and marketing
system, mechanistic and organic systems of manage- journals.
ment, working organisation, political system, and status (c) Scarce representation of strategy research. Sources
structure within the concern, among others. The meth- were rather scarce which would have represented the
ods of the study are those common to what is called field strategy line of research. Concerning this finding, our
350 K.A. Artto, K. Wikström / International Journal of Project Management 23 (2005) 343–353

Table 2
Findings from the analysis of key sources
Nr. Finding Scientific implication Managerial implication
(a) The dominant role of R&D Innovation management is an important theoretical body Empirical application of projects in
of knowledge business may be focused on business
renewal
(b) No operations management The discussion and theoretical views on projects as It can be that management of delivery
content manufacturing devices is scarce in the most cited academic projects in business is not an extensive
articles application area in industry
(c) Scarce representation of strategy The existing strategy research does not contribute to However, strategy and strategic
research project business. In the future, there may be a need for a management are important in practical
stronger body of strategy research applications
(d) Environment-dependent Project management body of knowledge represents too There is a need to match the management
approaches rigid and narrow closed system view, and therefore it does approach to the environment.
not emphasise the management of business in relation to Furthermore, flexible and adaptive
its environment approaches have an important role. This
enhances the management of business
rather than management of mere projects
(e) Need for several theoretical Organisation theory, innovation theories, sociological and The empirical phenomenon is complex.
foundations psychometric theories are important for further theory The understanding of the phenomenon
building requires cross-disciplinary views
(f) The firm from organisation Organisation theory provides a strong theoretical The firm and its business are in a focal
theory viewpoint foundation for understanding activities of a firm that uses role, while projects may be secondary
projects for achieving its business objectives. The unit of
analysis is a firm rather than a project
(g) Inter-organisational Management of networks, contracts, information and Business networks and inter-
collaboration knowledge are relevant issues for theoretical organisational collaboration between
considerations projects and firms are important

experience is, indeed, that the strategy literature does more, flexible and adaptive approaches have an impor-
not refer much to the project concept. Strategy was pres- tant role. This enhances the management of business
ent in many innovation-oriented key sources as a mana- rather than management of mere projects.
gerial issue to be integrated in the overall management (e) Need for several theoretical foundations. Manage-
scheme while running R&D projects, but, however, the ment of projects in firms is a complex phenomenon
strategy discussion in the key sources as a whole did and there is a need for several theoretical foundations:
not represent any strong indication towards strategy re- organisation theory, innovation theories, sociological
search. In our view, projects are vehicles for implement- and psychometric theories. Practical applications re-
ing or introducing strategies, which would emphasise the quire cross-disciplinary views for their development.
need in the future for a stronger body of strategy re- This implies challenging requirements also for scientific
search addressing the project business issue. work: to be effective, methodological schemes for fur-
(d) Environment-dependent approaches. Many ap- ther knowledge creation must employ cross-disciplinary
proaches and suggestions relied on environment-depen- research approaches.
dence. This means that approaches were suggested that (f) The firm from organisation theory viewpoint. The
would be adjustable to the application environment. organisation theory sources and their themes suggest
Furthermore, many suggested approaches enhance flex- that there are strong theoretical foundations for under-
ibility and adaptiveness to the business environment standing activities of a firm that uses projects for achiev-
while in use. All this takes distance from the traditional ing its business objectives. The implication is that in
project management approach of relying on the rational theoretical research settings an appropriate unit of anal-
plan. This also takes distance from traditional project ysis is a firm rather than a project. The organisation the-
management by expanding the managerial focus from ory key sources emphasise an open-system approach in
internal project management processes towards focusing relation to the organisationÕs environment, internal
on adapting to external business environments. Our and external sources for uncertainty, information pro-
conclusion is that the project management line of re- cessing, and organisational structures such as matrix
search represents a too rigid and narrow closed system structures. The important issue to consider in defining
view, and therefore it does not emphasise the manage- project business is that organisations – or firms – have
ment of business in relation to its environment. In prac- objectives, and therefore, the organisation or organisa-
tical applications there is a need to match the tions together conduct something that is considered as
management approach to the environment. Further- business. However, the objectives of the organisation
 K.A. Artto, K. Wikström / International Journal of Project Management 23 (2005) 343–353 351

may be expressed explicitly, or they may be contained in several firms with simultaneous and interconnected
more implicitly expressed purposes, directions, or business, which often means that project business could
values. also be viewed in a context of several firms. Several
(g) Inter-organisational collaboration. The theme of firms together can be considered to serve as a virtual
inter-organisational collaboration arises from the firm. The virtual firm––represented by an open busi-
sources. Such collaboration relates to contracts and ness system––has its own objectives shared by intercon-
information systems between organisations, and also nected firms and their actors. Finally, based on the
to the theme of external communication. The important findings and reasoning above, we define project busi-
role of business-driven projects in technological and eco- ness in the following way:
nomic change at the level of whole industries suggests ‘‘Project business is the part of business that relates di-
that management of networked business environment rectly or indirectly to projects, with a purpose to achieve
is important. Furthermore, knowledge transfer and objectives of a firm or several firms.’’
learning were emphasised in relation to R&D activities,
but also as a general project business issue.
Our analysis indicated several scientific and manage- 6. Further research on project business
rial implications that should be covered in the under-
standing and defining of project business. There are Project business is an evolving area both from a scien-
indications about the important linkage between R&D tific and managerial point of view. Our definition of pro-
processes, strategy and objectives. Both organisational ject business is a starting point for building practical
and management considerations in project business are project business applications, and a good point of
linked to the firm, its business, and environment. A need departure for deepening the content of project business
for adaptiveness in processes and actions links project in further research. Our project business definition is
business to a general need for cross-disciplinary and based on seven findings that need further validation in
in-depth understanding of the business as a large area. forthcoming research. The article introduces key sources
This has also an impact on practical capability require- that represent one scientific foundation for project busi-
ments among projectsÕ key stakeholders. ness. We welcome future studies to expand this scientific
From the analysis above, we can find three impor- foundation.
tant concepts that will be important in the definition Achievements within project management research
of project business: Ôpart of businessÕ, ÔobjectivesÕ, and are still a vital part in the development of project busi-
ÔfirmÕ. Concerning Table 1, we see that the article clus- ness. However, the context of project business is exten-
ters in the process area relate mostly to Ôpart of busi- sive, and therefore, there is a need for widening the
nessÕ concept, the technological and sociological change theoretical and practical areas from those traditionally
area relates to the ÔobjectivesÕ concept, and organisation represented by project management research.
area relates to the ÔfirmÕ concept. Also, all seven find- Organisation theory, innovation theories, sociologi-
ings in Table 2 provide us with a deeper insight for cal and psychometric theories all provide relevant theo-
the definition and characteristics of project business. retical foundations for the further development of
Thus, the seven main findings (a)––(g) reported above project business. The theory of a firm provides one rel-
could also be linked in a similar manner [as we did evant and specific context. The environment is an
with the three areas above] to the three important con- important determinant for successful management ap-
cepts in the project business definition. However, the proaches with projects. This emphasises the importance
links are not straightforward one-to-one links between of adaptive processes and the relevance of open-system
one finding and one concept. For example, the finding approach in organisational analysis for project busi-
(a) about the dominant role of R&D and innovation ness. The management of inter-organisational collabo-
context relates both to ÔobjectivesÕ (for the inherent ration is relevant for projects and business activities
choice of the developmental focus) and to Ôthe part in networks that cross organisational boundaries. Strat-
of businessÕ (for its specific application content issue). egy is an important issue as project business relates
As the connections of the findings (a)––(g) to the con- strongly to both the firm and its objectives. In the fu-
cepts in the project business definition are rather com- ture, there may be a need for increasing the number
plex; we exclude the specific reasoning of all of project business studies that would contribute to
connections in this article. Instead, we will restrict the new scientific knowledge in the strategy discipline.
discussion to the following few notions related to the Areas related to the structuring of the firmÕs product
ÔfirmÕ concept. The firm and its business are emphasised and processes are important in the future research of
in finding (f), but, however, the finding (f) and findings project business. These relate to overall objectives and
(g) and (d) also address the importance of the firmÕs competitiveness in firms. Furthermore, the logic of va-
environment and the inter-organisational collaboration lue creation is one important part of future project
between firms. This indicates the fact that there are business research.
352 K.A. Artto, K. Wikström / International Journal of Project Management 23 (2005) 343–353

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