Successful project portfolio management beyond project selection techniques: Understanding the role of structural alignment

Project portfolio management (PPM) is a commonly employed technique to align a project portfolio with strategic goals. Prior research has mainly regarded PPM as a methodology to optimize the overall benefit of a project portfolio. While adequate project selection techniques are certainly important, we argue that successful PPM – and consequently effective strategy implementation – depends on an organizationʹs structural alignment with the needs of PPM. Based on three cases in the German construction industry, we study the effects of fundamental strategic changes on the project selection and organizational structure. From our case analysis, we develop a substantive theory to explain how the criteria, used by a company to choose and evaluate its projects, influence the companyʹs structure through the information requirements created by such criteria. To assess whether our theory is in line with accepted schools of thought on organizational design, we integrate it with existing organizational theories. Our contribution is twofold. First, we offer a substantive theory that integrates strategy implementation, organizational information processing, and structural adaptation. Second, we introduce a new antecedent of successful PPM, namely structural alignment, thus introducing a new perspective on PPM beyond mere project selection techniques.