An Empirical Analysis of Distributed Organization of Technology Projects: Within and Between Firms and National Boundaries
Speaker
Abstract
| With the increasing globalization of technology projects, managers face many unique challenges in managing projects within and between firms and national boundaries. One set of challenges relates to the choice of the form of project organization that is appropriate for a particular type of project work and scope. The other set of challenges relates to identification of actionable strategies for improving project performance, given the form of project organization. To address the above challenges, we use a simple classification scheme based on the distribution of a project within and between firms, and geographical boundaries, and define five project organization types that are used in practice: (i) Collocated Insourcing, where a firm assigns project work to a collocated in-house team, (ii) Distributed Insourcing, where a firm assigns project work to its division/unit in a different city but in the same country, (iii) Outsourcing, where a client firm contracts project work to a vendor firm in the same country, (iv) Offshoring, where a client firm assigns project work to its division/unit in a different country and (v) Offshore-Outsourcing, where a client firm contracts project work to a vendor firm in a different country. Following this conceptualization, we empirically examine whether the extent of project uncertainty and project management style moderates the relationship between project organization type and project performance. This study examines three sources of project uncertainty – technological uncertainty, requirements uncertainty and architectural uncertainty – and two contrasting styles of project management – project control and project autonomy. The empirical analysis is conducted using primary data from 830 product development and software projects. Contrary to conventional wisdom, the analysis reveals that projects that span national boundaries (Offshoring and Offshore-Outsourcing) outperform Collocated Insourcing projects as requirements uncertainty and architectural uncertainty increase. Further, while project control has a greater positive impact on project performance in Offshore-Outsourcing projects, project autonomy has a greater positive impact on project performance in Distributed Insourcing projects, all compared to Collocated Insourcing projects. |
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| Prof.dr.ir. J.C.M. van den Ende |
