Mobilizing the Temporary Organization: The Governance Roles of Selection and Pricing

Many marketing transactions between buyers and suppliers involve short-term collaborations or so-called temporary organizations. Such organizations have considerable value-creation potential but also face challenges, as evidenced by their mixed performance records. One particular challenge involves relationship governance, and in this respect, temporary organizations represent a conundrum: On the one hand, they pose significant governance problems due to the need to manage numerous independent specialists under time constraints. On the other hand, temporary organizations lack the inherent governance properties of other organizational forms such as permanent organizations. The authors conduct an empirical study of 429 business-to-business construction projects designed to answer two specific questions: First, how are particular selection and pricing strategies deployed in response to monitoring and coordination problems? Second, does the joint alignment between the two mechanisms and their respective attributes help mitigate cost overruns? The authors follow a formal hypothesis test with a series of in-depth interviews to explore and to gain insight into the validity of the key constructs, explanatory mechanisms, and outcomes. Managerially, the authors answer the long-standing question of how to mobilize a temporary organization. Theoretically, they develop an augmented “discriminating alignment” heuristic for relationship management involving multiple governance mechanisms and attributes.acceptedVersio

The governance of projects

© 2019 Dr. Elham GhazimatinMany transactions between buyers and suppliers are executed through temporary organizations or so-called projects. Projects are one form of organization which consist of a set of diversely skilled firms working together on a complex task over a limited time period who will then disband upon completion. Projects are inherently appealing because of their ability to harness the skills and resources of a set of specialists while minimizing fixed costs and long-term commitments. Projects are used as the preferred form of organization across a broad range of industries, such as construction, IT, and movie making. Despite their popularity, projects are not panacea, as projects have unique characteristics that pose challenges with regard to the delivery of focal outcomes. In this dissertation, we examine two dimensions of project outcome; project cost overrun (i.e., the actual cost of a project is higher than the contracted cost of the project) and project innovation. This dissertation, consisting of two empirical essays, uses secondary data and econometric methods to understand 1) why project cost overruns happen and how these overruns can be mitigated (essay 1), and 2) how the organizational structure of projects can help or hinder the innovation outcome (essay 2)