PORTFOLIO STRATEGIC C ONTROL AND PORTFOLIO MANAGEMENT ... ?· i Portfolio Strategic Control and Portfolio…

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<ul><li><p>i Portfolio Strategic Control and Portfolio Management Performance </p><p>PORTFOLIO STRATEGIC CONTROL AND PORTFOLIO MANAGEMENT </p><p>PERFORMANCE </p><p>Reza Alimohammadi Bachelor of Science in Mechanical Engineering </p><p>Submitted in fulfilment of the requirements for the degree of </p><p>Master of Engineering (Research) </p><p>School of Civil Engineering &amp; Built Environment </p><p>Faculty of Science and Engineering Faculty </p><p>Queensland University of Technology </p><p>2016 </p></li><li><p>ii Portfolio Strategic Control and Portfolio Management Performance </p><p>Keywords </p><p>Portfolio Control; Portfolio Complexity; Portfolio Dynamic; Portfolio Management; </p><p>Portfolio Strategic Control; Portfolio Performance; Premise Control; Special alert </p><p>Control; Strategic Implementation Control; Strategic Control; Strategic Surveillance </p><p>Control; </p></li><li><p>iii Portfolio Strategic Control and Portfolio Management Performance </p><p>Abstract </p><p>BACKGROUND: Todays business challenges, fierce global competition and </p><p>the growing complexity of the business environment force organisations to gain </p><p>efficiency through their existing management processes and improve </p><p>competitiveness by implementing new management mechanisms. Project portfolio </p><p>management as one of the major competitive drivers for gaining efficiency and </p><p>effectiveness requires new methods of turning it into a powerful and competitive </p><p>weapon in organisation. This new approach, called Portfolio Strategic Control, </p><p>prepares portfolios for future environments by aligning portfolio objectives with </p><p>organisational strategy, managing resources, risks and opportunities in an integrated </p><p>fashion, and adding elements of flexibility and learning to the portfolios. Portfolio </p><p>strategic control combines elements of the portfolio management process and </p><p>functions of strategic control mechanism, in order to control portfolios in a strategic </p><p>manner and improve the performance of portfolio management. </p><p>THE PROBLEM: The main objective of this research was to investigate the </p><p>implementation of strategic control mechanism in portfolio management </p><p>environments and to assess the interaction between the use of four types of strategic </p><p>control (premise control, implementation control, strategic surveillance and special </p><p>alert control) and portfolio management performance in different contexts. </p><p>METHOD: A sequential dual research approach was selected for this study, </p><p>combining qualitative and quantitative techniques in order to obtain an optimum </p><p>level of quality and credibility. The qualitative part of the study consisted of semi-</p><p>structured interviews with ten individuals who hold key organisational positions in </p><p>seven high-performance, market-leading organisations. The purpose of this </p><p>qualitative part was to study the nature of using strategic control in portfolio </p><p>environment and to obtain better understanding of the practices, tools and techniques </p><p>that organisations use to apply strategic control mechanism in their portfolios. For </p><p>the quantitative part of the study, a survey was administered within 48 organisations </p><p>and 130 responses were collected and analysed by a series of statistical methods, in </p><p>order to analyse the use of a strategic control mechanism in portfolios and to assess </p><p>the relationship between strategic control and portfolio management performance in </p></li><li><p>iv Portfolio Strategic Control and Portfolio Management Performance </p><p>different contexts. While quantitative data were used to provide accurate empirical </p><p>results without bias, the qualitative part added richness to those findings. </p><p>RESULTS: The research results indicated that organisational tendency to use a </p><p>strategic control mechanism in portfolios increases when organisations experience a </p><p>high level of portfolio complexity and high level of portfolio dynamic. Also, the </p><p>results revealed that there is a positive and significant relationship between the use of </p><p>a strategic control mechanism in portfolio and portfolio management performance. </p><p>This direct relationship is moderated by contextual factors of portfolio size, portfolio </p><p>interdependency, portfolio dynamic and organisational governance type. </p></li><li><p>v Portfolio Strategic Control and Portfolio Management Performance </p><p>Table of Contents </p><p>Keywords.............................................................................................................................ii </p><p>Abstract ............................................................................................................................. iii </p><p>Table of Contents ................................................................................................................. v </p><p>List of Figures .................................................................................................................... vii </p><p>List of Tables ...................................................................................................................... ix </p><p>Statement of Original Authorship ........................................................................................ xi </p><p>Acknowledgements ............................................................................................................ xii </p><p>Chapter 1: Introduction .................................................................................... 1 1.1 Background ................................................................................................................ 1 </p><p>1.2 Research Problem ...................................................................................................... 2 </p><p>1.3 Purposes ..................................................................................................................... 4 </p><p>1.4 Significance and Scope............................................................................................... 6 </p><p>1.5 Definitions ................................................................................................................. 8 </p><p>1.6 Thesis Outline ............................................................................................................ 8 </p><p>Chapter 2: Literature Review......................................................................... 11 2.1 Historical Background .............................................................................................. 11 </p><p>2.2 Strategic Management: Control and Evaluation ........................................................ 12 2.2.1 Strategic Control ............................................................................................ 13 2.2.2 Theoretical Frameworks in Modern Strategic Control Literature ..................... 15 2.2.2.1 Schreygg and Steinmann Model (1987) ...................................................... 15 2.2.2.2 Goold and Quinn; the Paradox of Strategic Control (1992) ........................... 19 2.2.2.3 Preble Strategic Control Model (1992) ......................................................... 21 2.2.2.4 Strategic Control for Fast Moving Market (Muralidharan 1997) ................... 22 2.2.2.5 Strategic Control for in Triggering Strategic Changes (Julian and </p><p>Scifres 2002) .................................................................................................. 24 2.2.2.6 Summary of Strategic Control Theories and Frameworks ............................. 25 2.2.3 Role of Balanced Scorecard Methodologies and Critical Success Factors </p><p>in Strategic Control ........................................................................................ 27 </p><p>2.3 Project Portfolio Management .................................................................................. 30 2.3.1 Strategic Portfolio Management...................................................................... 31 2.3.1.1 Portfolio Definition and Organisational Strategy .......................................... 31 2.3.1.2 Portfolio Control .......................................................................................... 36 2.3.2 Portfolio Management Success and Portfolio Performance.............................. 39 </p><p>2.4 Contextual Factors ................................................................................................... 41 </p><p>2.5 Summary and Implications ....................................................................................... 44 </p><p>2.6 Research Questions and Hypotheses ......................................................................... 46 </p><p>Chapter 3: Research Design ........................................................................... 50 3.1 Methodology and Research Design ........................................................................... 51 </p></li><li><p>vi Portfolio Strategic Control and Portfolio Management Performance </p><p>3.1.1 Methodology .................................................................................................. 51 3.1.2 Research Design............................................................................................. 52 </p><p>3.2 Data Source and Selection ........................................................................................ 61 </p><p>3.3 Instruments .............................................................................................................. 62 </p><p>3.4 Procedure and Timeline ........................................................................................... 64 </p><p>3.5 Analysis ................................................................................................................... 65 </p><p>3.6 Ethics and Limitations.............................................................................................. 66 3.6.1 Ethics ............................................................................................................. 66 3.6.2 Limitations ..................................................................................................... 67 3.6.3 Strengths and Weaknesses .............................................................................. 67 </p><p>3.7 Summary ................................................................................................................. 68 </p><p>Chapter 4: Results .......................................................................................... 69 4.1 Survey Demographics .............................................................................................. 69 </p><p>4.2 Descriptive Statistics of Variables ............................................................................ 72 </p><p>Reliability of Scales ........................................................................................................... 77 </p><p>4.3 Hypotheses Test Result ............................................................................................ 77 4.3.1 The Statistical Methods .................................................................................. 77 4.3.2 Hypotheses Testing ........................................................................................ 79 </p><p>4.4 Summary ................................................................................................................. 95 </p><p>Chapter 5: Analysis ........................................................................................ 97 5.1 Retracing Research Variables ................................................................................... 97 </p><p>5.2 Implementation of Strategic Control in Portfolio ...................................................... 98 </p><p>5.3 Strategic Control and Portfolio Performance .......................................................... 106 </p><p>5.4 Summary ............................................................................................................... 122 </p><p>Chapter 6: Conclusions ................................................................................ 125 6.1 Retracing Research Questions ................................................................................ 125 </p><p>6.2 Summary ............................................................................................................... 126 </p><p>6.3 Theoretical and Managerial Contribution ............................................................... 129 </p><p>6.4 Research Limitations.............................................................................................. 131 </p><p>6.5 Suggestions for Future Research ............................................................................ 131 </p><p>Bibliography ....................................................................................................... 135 Appendices .......................................................................................................... 144 </p></li><li><p>vii Portfolio Strategic Control and Portfolio Management Performance </p><p>List of Figures </p><p>Figure 1: Strategic Control Model ........................................................................... 13 </p><p>Figure 2: Traditional Strategic Control Management ............................................... 14 Figure 3: Strategic Control Model (Schreygg and Steinmann 1987) ...................... 16 </p><p>Figure 4: Type and Characteristic of Strategic Control ............................................ 19 Figure 5: Strategic Control Model (Goold and Quinn 1990) .................................... 21 </p><p>Figure 6: Strategic Control Components in the Strategic Management Process ....... 21 Figure 7: Strategic Control Process (Julian and Scifres 2002, p. 144) ...................... 25 </p><p>Figure 8: Project Portfolio Process Overview (Bible, Bivins et al. 2011, p. 20) ...... 35 Figure 9: Control Model in Multi-project Organisation (Dahlgren, Soderlund et </p><p>al. 2010, p. 18) .......................................................................................... 44 Figure 10: High-level Conceptual Research Model ................................................. 50 </p><p>Figure 11: Overall Research Methodology .............................................................. 52 Figure 12: Quantitative Study Demographic for Age ............................................... 69 </p><p>Figure 13: Quantitative Study Demographic for Years of Business Experience ....... 70 Figure 14: Quantitative Study Demographic for Years in Current Position .............. 70 </p><p>Figure 15: Quantitative Study Demographic for Geographic Dispersion.................. 71 Figure 16: Quantitative Study Demographic for Position of Respondents ................ 71 </p><p>Figure 17: Quantitative Study Demographic for Industry ........................................ 72 Figure 18: Quantitative Study Demographic for Portfolio Main Objective .............. 72 </p><p>Figure 19: Relationship between Use of Premise Control in Portfolio and Portfolio Complexity ................................................................................. 98 </p><p>Figure 20: Relationship between Use of Implementation Control in Portfolio and Portfolio Complexity ........................................................................ 100 </p><p>Figure 21: Relationship between Use of Strategic Surveillance in Portfolio and Portfolio Complexity ............................................................................... 100 </p><p>Figure 22: R...</p></li></ul>

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