Relational capabilities in projects

Maria Kapsali

Background

This study will explain how governance mechanisms can facilitate the development and utilization of relational capabilities in projects. The 17 projects belong to the IST and Public Health programmes of the EU FP5 and they were supposed to develop and/or deploy ICT systems in specific healthcare settings in order to improve services such as the comparison of epidemiological data across European countries, the development of ICT software for medical services and the deployment of ICT in specific industries through the mobilization of industry partnerships and users The idea is that contractual and relational governance have not been examined at the routine level in projects and it is not clear which of these government mechanisms can support projects to become more relationally competent

Relational capabilities

The set of routines that support exchange and interaction

• Part of the dynamic capabilities approach which is part of RBV • Barrow field, concept is usually dispersed under different terminology • Focused on dyadic alliancing, partnering or networking between

permanent organizational forms • Difficulty in understanding how these routines actually work / lack of

empirical studies • Theory has tried to connect contractual and relational governance but not

necessarily relational capabilities

• Capabilities are defined as the knowledge residing in the routines of an organisation to integrate and coordinate its specific resources, skills and competencies to perform various activities (Helfat and Peteraf, 2003, Zollo & Winter 2002).

• Contractual capability refers to successful management of the contingencies involved in transaction relationships with other parties, and their implications for the efficiency and effectiveness of service delivery (Argyres and Mayer, 2007).

• Relational capability refers to the application of socially complex routines, procedures and policies in inter-organisational relationships (Johnson et al., 2004). Relational capable organisations invest in relation-specific assets, exchange knowledge with each other, combine complementary but scarce resources, and govern their relationships to achieve successful outcomes (Dyer and Singh, 1998).

Definitions and differences

Theories

• Contractual vs relational governance = safeguards against opportunities vs trust and informal relational norms

• Relational capabilities are based on routines steming from long term strong ties / alliance or partnering between organizations that have a history and knowledge about each other

Conditions: A review of the literature revealed 6 components of relational capabilities including 19 routines and

Variables: 13 managerial and 15 governance mechanisms within contracts

Equivalent theories in projects

• Relational capabilities are not the result of long term strong ties or histories of collaboration / they consist of temporary short lived weak ties that get easily decoupled

• The time to develop relational routines is short, there is a lot of risk which project partners compensate with swift trust, and the levels of knowledge exchange and learning are spontaneous and more demanding

• Formal governance structures do not support the development of relational routines and they have an inverse relationship

• Interactions and relations in projects are non-linear, more unpredictable, have shorter life cycles and are more complex

• Project people have to go beyond demarcated boundaries to create relational routines despite governance demarcations

Research Questions

While prior studies have started to shed light on the interplay of both governance mechanisms, limited in-depth, empirical research examines which parts of relational routines are actualized and which governance mechanisms contribute to the development of relational capabilities and how (Klein Woolthuis et al., 2005; Zheng et al., 2008)

Which components of relational capabilities become routinized in projects?

andWhich contractual mechanisms enhance, support or inhibit the

routinization of relational capabilities in projects and how?

Research Method: Qualitative Comparative Analysis of multiple case studies

• 17 EU FP projects • QCA uses binary coding and Boolean algebra to deduct from

qualitative in-depth data TRANSLATION 1. Create an analytic frame from literature (conditions and variables)2. Create truth tables for each condition based on the analytic frame 3. Find configurations that are significant across the cases 4. Find the significant routines and the significant governance

variables in these routines 5. Suggest the contractual elements that would benefit the

development of relational capabilities in projects

Research Method: Qualitative Comparative Analysis of multiple case studies

• A combination of deduction and induction • The selection of conditions and variables from literature to create a

frame of analysis to quantify in binary terms qualitative data • The algorithms result in configurations of variables that show the

relationships between the variables within each condition not just one variable to one condition

• This also explains why these variables are negative or positive towards the condition since the quantification is based on rich data

• Therefore QCA answers both: 1. What (deduction) but in a more configurational way 2. Why (induction) because the configurations are based on the

causality within the interviews • in projects

1. Create an analytic frame from literature

• Conditions: a compilation of the relational routines from the literature • Variables: the main governance mechanisms in contracts

2. Create truth tables on the analytic frame one for every of the 17 projects

2. Create truth tables from the 17 projects one for every of the 19 relational routines

3. Configurations Find configurations that are significant across the cases

To find the configurations that are significant across the cases I selected the ones with consistency of >70% and coverage of cases >50%

ALIGN Purpose*~speci*~routinegov REPET plan*measure* ~toolmech* ~input* ~routinegov KNWSHARE Purpose*~input*valuecapture KNWOV automatic*feedback1*repetition* ~plan* ~modul*zone* ~toolmecha IDEAS

purpose*~automatic*~feedback1*~repetition*~interrupt*~novel*~interdep*problemsolv*~tech*~customrr*~situatedact1*~cont*~puncert*~plan*~com*~execontrol*~measure*~problesolvcycl*~situatedact2*~speci*~trigger*~modul*~zone*~toolmechan*~input*~routinegov

DESIGN2 purpose*problemsolv*situatedact1*~puncert*~plan*~com*problemsolvingcycl*speci*~zone*~routinegov*valuecapture

4. Find the significant routines and the significant governance variables in these routines

Project Management Governance

Realization component

Assessment component

Access to knowledge

REPET

ALIGN

KNOWLEDGE SHARE

Co-innovation component

Access to opportunity

DESIGN2

IDEAS

Contract Governance

KNOWLEDGE OVERLAP

Relational capable project

• our assumptions about the nature and development of relational capabilities are incorrect since they are not applicable to all types of organizations, indicating that the contractual governance should differ as well

• In projects:

5. Suggest the contractual elements that would benefit the development of relational capabilities in projects

• To align agendas you need contracts without tight specifications of product and activities

• To make relational activities into repetitive routines the manager should plan for the interaction and use measurements as points of discussion rather than reporting mechanisms dictated by contractual specifications

• To create successful knowledge sharing it is necessary to create opportunities for interaction with the explicit purpose to find common ground amongst the goals of the participants – what each of them wants to get from the project – but also with strong focus on the value that the project needs to deliver to the user

5. Suggest the contractual elements that would benefit the development of relational capabilities in projects

• To successfully utilize knowledge overlap amongst project partners, there should be systematically repetitive opportunities for interaction and feedback to the point that they become automatic and these activities should be tolerate even if the project plan or reporting are skewed. This is an important element to overcome the natural modularization in complex projects.

• To exploit ideas emerging within interaction networks no element within the contract should inhibit purposeful alignment of goals with the sole exception the definition of the problem that the project needs to solve

• In design interactions the focus should be on the value created to the user and the problem to be solved as manifested in the contract while purposeful interaction and continuous feedback should be let free of contractual monitoring and feedback mechanisms

Any Questions please ask