Design and implementation in major investments — A project network approach

Scand. J. Mgmt, Vol. 11, No. 4, pp. 377-394. 1995 Copyright © 1995 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0956 5221/95 $9.50 + 0.00

Pergamon 0956-5221 (95)00020-8

DESIGN AND IMPLEMENTATION IN MAJOR INVESTMENTS A PROJECT NETWORK APPROACH BO HELLGREN University of Linkgping, Sweden and Warwick Business School, U.K. TORBJORN STJERNBERG Stockholm School of Economics, Sweden and Agder College, Norway (First received April 1994; accepted in revised form April 1995) Abstract - - Many investments in modern society take place in project networks. This article proposes a project network approach for describing the design and implementation processes in major investments. The design process of major projects is "fuzzy", takes a long time, and is hard to capture. The implementation process, on the other hand, takes place in "semi-hierarchical" networks, and is easier to plan and control. The actor that controls the transformation of the political design process into the implementation process has a unique strategic position in the dynamically changing network. This means linking processes that are characterized by separate logic and network structures. Data from processes of design and implementation of three shopping malls illustrate the theoretical framework.

Keywords; Projects, networks, major investments, processes.

NETWORKS AND PROJECTS Studies of collaborative arrangements are usually of long-term inter-organizational solutions, such as mergers and acquisitions, joint ventures, equity partnership, collaborative research pacts, etc. (e.g., Harrigan, 1986; Powell, 1987; Borys and Jemison, 1989). Furthermore, it is long-term arrangements that are relevant when relationships in industrial markets are studied from a "market as network" perspective (e.g., Johansson and Mattsson, 1987; H~igg and Johansson, 1988). But there are few theories and models for understanding, describing and prescribing the activities of inter-organizational networks from a project perspective - - from a short-term perspective. This is notable because so much investment in modern society takes place in proiect networks. These kinds of networks play an important role in the "creative destruction" that is necessary in order to make resources available for development (Schumpeter, 1950). But the driving force in this case is not the individual entrepreneur (Schumpeter, 1935; Mintzberg, 1973: Peterson, 1981; Stevenson and Gumpert, 1985; Gartner, 1985). Rather, the major force behind the transformation of an economy - - according to a project perspective - - consists of proiect networks that are created and recreated for different purposes. The entrepreneurs are individuals and organizations working in different forms of liaisons with other individuals and organizations. These liaisons are the focus of this article. The purpose is to elaborate a conceptual framework useful for understanding and analyzing inter-organizational relations in designing and implementing major investments. We raise two sets of questions related to major investments. 377

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(a) What are the generic characteristics of the inter-organizational networks involved in design and implementation of major investments? In particular, we ask: what are the significant differences between the networks of organizations involved in the design processes of a major investment, and the networks involved in implementation activities? (b) Are there positions in the network that enable some actors to take a lead in managing the network and in determining the outcomes of its activities? If so, what characterizes these positions? In the project management tradition, techniques and routines for the planning and conducting of well specified projects are emphasized. Both the ends, and often also the means of the project, are seen as given. The planning of the project becomes the major method for controlling anticipated uncertainties (Pearson, 1991; Engwall, 1992; Packendorff, 1994; Lundin and Srderholm, 1994). The American professional association, the Project Management Institute, defines project management as " . . . the art of directing and coordinating human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, cost, time, quality, and participant satisfaction" (PMI Standards Committee, 1987). Normative techniques and methods used for project management have been developed in an engineering and operations analysis tradition. Projects are seen as tools for achieving specified targets. One of the basic assumptions, on which the project management tradition is based, is the ability to define clearly goals and unambiguous project tasks (Frame, 1987; Burke, 1992; Lock, 1992). Following this assumption, most methods (e.g., critical path method (CPM) and program evaluation and review technique (PERT), as described by Wiest and Levy, 1969; Sapolsky, 1972; Frame, 1987) are based on a work breakdown structure, and attempts are made to define the optimal sequence of activities and allocation of resources (Harrison, 1985; Frame, 1987; Archibald, 1992). These techniques have shown their usefulness in situations with well defined ends. However, most projects include phases and aspects where these techniques and routines do not apply. Projects are also processes of organizing where ends and means are continually redefined in the interactions of actors. In organizations for major investments, critical managerial tasks are related less to technological and economic matters through work breakdown structures, and more to how social arrangement shapes the " . . . , flow of information, authority and risk bearing within and among organizations" (Stinchcombe and Heimer, 1985, p. 15). How these collective units of organizations are managed in coordinated activities is of central concern in this article,

THREE CASES ILLUSTRATING DESIGN AND IMPLEMENTATION IN PROJECT NETWORKS The inherent uncertainties are extreme in the design and implementation processes of major societal investments. A number of organizations - - with more or less conflicting goals - - legally related or related through formal or informal contracts, markets and/or social arrangements, are supposed to collaborate. Our focus is on patterns of interactions among organizations, not on individuals and processes within organizations. Thus, when we use the word actors, we are referring to organizations. Our empirical examples concern development of shopping malls, but the conceptual framework is relevant for major investments in other mixtures of market and social relations.

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In a series of research projects conducted since 1976, we have studied design and implementation processes in major societal investments, primarily shopping malls. We will illustrate some of the power and dependence relations by looking at the cases of three malls; the Ring, the Triangle and the Sture Gallery. The Ring and the Sture Gallery are located in central Stockholm and the Triangle is located in Malmr, the main town in the southern part of Sweden. We will concentrate on the Ring to illustrate points in our analysis, but will draw on the other cases as appropriate. The study of the Ring was initiated in 1978, originally intended as an action research project in order to strengthen the shop owners' and their employees' role in the design network. In practice, only minor parts of the network participated with us in efforts to affect the processes in the network. We had little influence as action researchers, but observed closely the design and implementation processes between 1978 and 1983. During this period, four researchers were involved on a half-time basis, conducting interviews and analyses of documents describing the process. The more intensive phases of the design started in 1977 with the selection of the company to build the mall. In 1983 the mall was opened. In the studies of the Sture Gallery and the Triangle we interviewed key actors after the opening of the malls, in 1989 and 1991, respectively. These interviews were part of an effort to identify criteria for judging both the outcomes and the processes of major investments carried out in project networks. A panel of 40 experts (city planners, architects, politicians, and contractors/ owners) judged the Sture Gallery to be one of the most successful outcomes of a rather complicated process. The Triangle was judged to have had a highly problematic process, leading to the least successful outcome in our sample of investment processes. The Ring was midway in terms of outcome and process criteria.

PROJECT NETWORKS - - A WORKING DEFINITION The project network perspective describes situations with an extreme degree of uncertainty because of the interdependence among organizations. In the network, there is an imbalance in the distribution of material resources (money, land, etc.), intangible resources (e.g., time, knowledge. contacts, reputation, trust), and authority based on formal rules and regulations. Because of this imbalance, relative power of each will vary in accordance with how vital its contributions are lor other actors in the network (Weber, 1964; Dahl, 1957; Emerson, 1962; Aldrich and Mindlen, 1978). This results in quite different strategies despite possible similarities in goals. Some organizations in the network may work closely together, forming a core of actors with strong ties. whereas others have weaker ties to only a few of the actors. Moreover, the closeness and the character of these ties shift over time because of the different strategic choices of actors (Child. 1972). Our focus is on such project networks. In our conceptual framework, a project network is defined as (1) a set of relations, where no single actor may act as legitimate authority for the network as a whole, (2) where the network is open in the sense that there are no definite criteria by which the boundary of the network may be identified and controlled, and (3) where the network is temporally limited, dynamically changing and (partially) reconstructed from one project to the next. We will discuss these three in terms of propositions in this section. This project network perspective, we believe, both complements and challenges some of the assumptions on which normative methods for project management are built.

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Proposition 1: no single actor may act as legitimate authority for the network as a whole Cook and Emerson (1984) have applied the network concept to an analysis of Williamson's markets and hierarchies (1975). Their network is a very general concept describing relations, where the hierarchy may be seen as a special form of network. In the field of management, on the other hand, the concept is used to specify an intermediary form between markets and hierarchies (cf. Thorelli 1986). We use the network concept in the latter sense, i.e., to identify a relationship that is neither a market nor a hierarchy. The division of work in the network means that organizations are dependent on each other and have to cooperate. It also means that coordination is vitally important. And yet there is no formal authority that alone can impose the necessary amount of coordination (Litwak and Hylton, 1962). We can therefore assume that "management" of a network will have a different content and meaning from management of a hierarchy. In one sense, the political bodies act as a hierarchical top, formally heading several of the "controlling bodies" such as building authorities, health and fire inspectors, etc. However, the politicians may use their authority only according to very specified rules and situations. Their role and influence differ considerably from what is typical of the executive level in an ordinary hierarchy. During later phases of a project, the owner of the rights to build the property (by contract with the landowner), acts as a - - although restricted - - hierarchical top with formal contracts regulating the obligations of contractors and others. We will come back later to the pseudo-hierarchical character in the implementation process. During the earlier design process, we have not been able to identify any actor that resembles the top level of a hierarchy with regard to the network as a whole (although the landowner in a more limited sense had a role as coordinator). This does not mean that hierarchies and top level authorities are completely absent. On the contrary, each separate actor, i.e. each organization involved in a project, is organized as a hierarchy. The absence of hierarchical top is totally with regard to the coordination and executive function of these separate hierarchies in the project network. With no hierarchical top of the project network, there are no common effectiveness criteria for evaluation of the network's efforts. Each actor in the network establishes his own criteria and some of these may be antagonistic to those of other actors. Still, there has to be some common task or"joint commitment" to keep the network together. This common task (e.g., creating a mall) may be seen as the raison d'etre of the network. The common task of the network is not framed like business goals in the traditional sense. Instead it coexists with - - in some respects it is instrumental to, in other respects antagonistic to the attainment of each actor's individual business goals. Therefore, decision processes in the network may be better understood by political models than by models of rational decision processes (as in the project management tradition) in that uncertainty is a result not only of a lack of information but also of relations of power and dependency (Benson, 1975). One of the shops that opened in the Ring illustrates this proposition. The owner would have preferred not to have any shopping mall in the area at all. But when a mall was planned, he saw no alternative to moving from a nearby location to the mall. When discussing the design of the mall, he shared the "goal" of creating an attractive mall with the other establishing actors. During the design of his shop, several conflicting interests and priorities had to be worked out, there was competition among shop owners for attractive areas, and conflict of business goals with the goals of the controllers of health and safety regulations. -

-

Proposition 2: there are no definite criteria by which the boundary of the network may be identified and controlled One characteristic of project networks is that once the development process has started (i.e.,

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when the "go-decision" has been taken), quite often, the process acquires a life of its own (Persson, 1979; Hall, 1980). One gets the impression that it is always possible to compensate for the scarcity of money, support, or information or other kinds of vital resources by inviting new actors to take part in the network. This is possible because there is no hierarchical top controlling the network and its boundaries. A major project, once it is conceived, never seems to die, although it may be long postponed (as was the tunnel under the English Channel) or replaced by another project performing the same task (as was a nearby mall). Since the network as a whole does not have the capacity to control the entrance of new actors, it is sufficient that one actor, already in the network, agrees to work with an actor, not yet in the network, to make that actor part of the network. A new actor may be invited to strengthen the position vis-h-vis the other actors in the network, regardless of the contribution to the common task of the network. The entering organization chooses to take part if perceived benefits for itself outweighs the costs - - it is little concerned with its contribution to the common tasks of the network. One example of these loose boundaries of the network was our own research in the Ring case. According to the Swedish Work Environment Act, the safety officer of the regional union of shop employees had a legitimate role in the network. We were invited by him to follow and, if possible, influence the design processes in order to achieve a higher influence for the employees. Some actors, including several of the shop owners, welcomed this. They felt that they themselves had too little influence. Other actors, such as the owner of the building rights, feared that our involvement might disturb the process. Other examples of dramatic changes in the boundaries of the network were seen in the case of the Sture Gallery. The ownership of a major part of the existing buildings changed during the design phase, opening up totally new design alternatives. Two years after the construction work had started, one major owner bought the company owning another major part of the block. Also two of the three separate construction companies originally involved joined to form a new company at about the same time. These changes had effects on the design teams. Some of the architects became more influential, whereas others had to leave the project. This proposition has important consequences for the analysis of networks. There exist several mathematical tools for describing and analyzing relations between actors in networks. However, these methods require criteria for defining the boundary of the network, i.e., criteria for inclusion or exclusion of actors. Such criteria violate our characterization of project networks. One feature of project networks is their elusive and changing structure and their loose boundaries.

Proposition 3: each project is temporally limited and dynamically changing and (partially) reconstructed from one project to the next In the project network approach, there is a distinction between, on the one hand, actors working in a project specific network, and, on the other hand, wider networks of actors that regularly cooperate. The network relations in the wider more permanent networks are more or less ~tatic within the overall societal context (i.e., institutions such as the economic system, laws and regulations, traditions, etc.). Such relations can vary widely within the project specific network during the life of a project. The project specific network is a dynamic network that is continuously shaped and reshaped during the design and implementation processes. The project specific network changes automatically over time. Certain roles and relations in the network are linked to formal decisions that by law (or by other social institutions) have to be taken. Such decisions involve partly separate sets of actors whose influence changes over time. (The changing power of the different actors over the life cycle of the Ring is analyzed in Hellgren

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and Stjernberg, 1987.) Because of the decisions and organizational involvement stipulated by the social institutions, the relations between some actors follow patterns that tend to repeat themselves and constitute a stabilizing force in the wider network. The inter-organizational relation in a project network can be seen as a long-term investment or as a short-term means of achieving a specific purpose. In reality, the organizations live in a simultaneous mixture of opponent and partner relations (Hellgren and Melin, 1991; Easton et al., 1993). An opponent in the short run, may in the longer perspective be seen as a potential partner. Similarly, the partner in the short run may be a competitor in future projects. This possible dual relationship between actors is an important feature of inter-organizational relations in project networks. Thus, our working definition is related to a competitive perspective (e.g., Porter, 1980) in which firms are portrayed as trying to build up resources at the expense of its competitors (Bourgeois and Brodwin, 1984). Our working definition is, however, also related to a collaborative perspective in which finns, in arrangements such as joint ventures (as described by Harrigan, 1986) or in networks of supplier and customer relations (Hfikansson, 1982, 1992; Johansson and Mattsson, 1987; H~igg and Johansson, 1988), are outlined as trying to reduce uncertainty through long-term cooperation with firms that control essential resources. In the Ring, several of the establishing companies, such as the drug store, the post office, the liquor store, and the public health insurance office - - all part of government regulated monopolies - - formed a secret unofficial coalition for negotiations with the "organizer" - - the owner of the building rights. Although they established a cartel for rent negotiations, they also had partly conflicting interests to work out about what localities each should attempt to rent. The character of each relationship is not only a result of the balance between conflicting and joint interests, but to a large degree also a result of the processes of working out the agreements regulating how these interests should be reconciled. These processes create or destroy the trust between actors. This trust will affect the forming of future networks. Some actors may consider their long-term position, thus emphasizing the partner relationships, while others may try to optimize their position in the short term, thus emphasizing the opponent relationships. In other words, the actors' rationalities, in terms of goals, time orientation and problem-solving styles (as discussed by Pettigrew, 1985), shape and reshape the project network during the project's lifetime. In spite of the dynamically changing relations during the life of a project network, there are also strong rigidities in the structure. This has to do with the many agreements made between pairs of actors. These agreements form a rigid web. Changing one agreement often has effects on several other agreements. For instance, any shop owner wanting to expand his shop will find that such a change not only needs to be negotiated with the company that builds and rents the shop, but also that it leads to negotiations between this company and several of the other nearby shops. In the following, attention is particularly directed to the structure of project networks in terms of actors and their roles and relations, the different types of logic of the design and implementation processes, and finally the crucial managerial aspect of balancing these different types of logic.

DESIGN AND IMPLEMENTATION PROCESSES One major feature of project networks is the coexistence of two separate structural configurations in the design and the implementation process, respectively. The principal role of each actor and the actor's bases for participating in the network are described in the Appendix. We have attempted to give a short and focused role characterization. The labeling of each category is supposed to mirror the essential aspect of the role.

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In Fig. l, we illustrate the separate structures in terms of actors' roles and relations during design and implementation. Figure 1 and Appendix 1 are both based on the Ring mall case, but similar figures and tables have been used to illustrate the two other project networks studied. Some of the actors in these networks participated as holders of formal authority, such as the controllers who by law have a say in fire precautions, health and hygiene and so on. The politicians participate in the network on similar grounds. Others, such as the designers, are invited to participate by some other individual actor. Thus they contribute time and expertise to that particular actor, their client, rather than to the network as a whole. The constructors, and the visionaries also participate on this sort of basis. A third basis for participating in the network is the control of the monetary flows needed in the short or the long tenn. Tenants, and to some extent the employees who provide the link with the customers, are examples of this type of participant. The customers themselves have no direct influence in the design of these malls, and are not therefore part of the network. In Fig. 1, we draw a line between the design and the implementation of a major investment, such as a shopping mall. The line is not defined by time, but rather by activities. Design activities (above the line) may continue to the end of the process, although the more significant design processes take place early. And some aspects of implementation (below the line in Fig. l) may start early, such as the clearing of the ground. In practice, the line between these two phases, design and implementation, may not be as straight and distinct as it is shown in Fig. 1.

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Fig. 1. The networkdesigning and implementing the Ring. Note thatthe nodalcharacteristicsof the actors in the network are indicated by the term used to characterizeeach actor (see Appendix 1), and that the relational characteristics are of many different kinds, formal power holder, knowledge and laborcontributor,etc., as indicated in the figure. The design phase is illustrated above the line, the implementation below.

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DIFFERENT TASK AND LOGIC The key task of the design process is the formulation of visions capable of linking different interests into common use of resources. Aesthetic, economic and political issues are blended. The logic - - i.e., basic principle - - is to mobilize commitment for decisions as a ground for actions. The key task of the implementation process is the coordination of resources and routines. The basic principle is to transform the decisions into concrete actions, such as the physical construction of a building. Thus, each task demands different types of logic. The differences are so significant that, in many countries there exist separate professional societies focusing on each task with very little overlapping in membership. Societies for regional planners are much devoted to professional issues in the design processes. Societies of project managers are focusing on the roles and the tools of project managers in implementation. Table 1 illustrates the fact that there is very little overlapping between the two professional groups. We have not been able to link the memberships to actors in the particular studied cases. Thus, to study whether one of the two professions takes part in design and the other in implementation is a task suitable for future studies. Decision processes include activities that may reduce the commitment to action - - activities such as examining several alternatives and critically evaluating each of them. This is particularly so in situations - - as in project networks - - when there are challenging and even contradictory goals both among single actors themselves and between actors in the network. Thus, decision processes in project networks produce uncertainty and uncertainty inhibits action (Gladstein and Quinn, 1985). Decision-making and action have been described as running in simultaneous, decoupled, and parallel processes supporting different vital organizational interests (Brunsson, 1985). In general, a central aspect of complex projects is the handling and balancing of the two tasks and the two types of related logic (i.e., for producing decisions and actions, respectively). In the projects we have studied, acting does not seem to be the problem emphasized by the participants. "To know what to do", i.e., to decide, is both more difficult and more important to the success of major societal investments than "getting things done", i.e., implementing. The problematic political decision process of the Malmt~ Triangle Mall may be compared with the technical difficulties of the Sture Gallery. The Triangle was judged by our panel of experts to be a problematic project; the Sture Gallery was judged as a very successful project. In the Triangle

Table 1. Joint memberships in the Swedish societies for regional planners and project managers, respectively

Individual memberships Organizational memberships

The Swedish Society for Town and Country Planning

The Swedish Project Management Society

Joint membership

1400

600

5

530

24

1

The data are from 1988 and 1988/89 (the year one of the authors of this article was one of the five persons holding membership in both societies). "The Swedish Society for Town and Country Planning's aim is to spread knowledge and stimulate debates about the goals, methods, and consequences of town and country planning." "The Swedish Project Management Society tries to, within its scope - - rational leadership and administration of projects - - contribute to the spread of information about and development of project work methods" (our translation of parts of the mission statements).

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project, the political opposition campaigned with a redesign of the mall as a promise to the voters. In practice, only some of the changes proposed by the opposition before the election were then implemented after they had won the election. But the political fights about the design created complications for the designers and the organizer, such as confusing stop/go signals. In the Sture Gallery, there were important shifts in ownership of the city block, and major technical problems had to be solved in order to protect some old buildings of cultural value. However, the promises of the owners to respect these values (and work them into the design and profile of the mall) contributed to not getting any major political fights about the mall. Instead the design process seems to have been fairly smooth, up to the point where dramatic changes took place as a result of changes in ownership and power structure. Thus, in the Triangle and the Sture Gallery cases, there were important changes in the power structure resulting in design changes. In the Triangle, the threat of changes seems to have been more important than the actual changes, and led to the image of a problematic process (as judged by our panel). In the Sture Gallery, the shifts in power due to changed ownership of the block led to changes in the roles of organizer, and designer. These changes led to important changes in the design and implementation, without causing the type of uncertainties as in the Triangle case. The structure of the network of actors involved, i.e., the relations between the actors, their power, their contributions and benefits, determines the design and implementation processes. In turn, the structure is partly formed in the design process. We thus have an interaction between process and structure. Other important determinants influence these design and implementation structures and processes. Legal structures determine the power of the actors. For example the legal rules give the fire inspector the right to veto certain types of solutions. Another example is the requirement that the unions' safety stewards should be involved in the design of the working environment of the work places, such as the shops. Some of the actors base their influence more on their expertise than on legal rights, such as the designers. It is important to bear in mind that these bases shift over time, at one time making one actor more powerful, at other times making other actors more influential (as described in the Appendix). The design rather than the implementation was, as mentioned above, the more problematic set of processes. Why then are the design processes, rather than the physical implementation process, regarded as more problematic? The answer to this question is indicated by the dynamic changes of the network's structure over time as shown in Fig. 1 above. This is elaborated in the following sections.

AN EMERGING, DYNAMIC NETWORK IN THE DESIGN PHASE The design processes in a network are processes whereby decisions emerge in parallel with the emergence of the network. No single actor can control the emerging network, although some actors may control part of it. Depending on the stage of the design phase, the constellation of actors in the network varies, as does each actor's influence. In the initial stage of a large project, the different actors try, in a political process, to get their ideas and goals for the project accepted. The basic concept, i.e., the reason for the project, is formulated and articulated. Different ideas and solutions are evaluated. Once the basic concept is set and the project begins to mature, the design process starts to change focus towards more detailed problems: what is the best design for each of the shops in the mall? Which solution is best for a specific problem, such as the transportation of goods to the mall?

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It is important that the design process should produce explicit decisions. In the case of the Triangle, the organizer and the politicians originally in power managed to make informal design decisions, but did not manage to make the decisions formally needed to start the implementation process before the change in political power led to a reconsideration of some of the major design decisions. The design process was thus reopened (cf. Jacobsson, 1987). The uncertainty created in the design process is generated, not by irrational behavior on the part of the actors, but by each actor's attempts to behave rationally in a world of strong interdependencies and little control. The interdependencies make it impossible to assume that the environment is random. Instead, each actor is faced with a highly turbulent environment as described by Emery and Trist (1965). Let us illustrate some of the dynamics that create this uncertainty during the design processes.

A. Short- and long-term optimizing One cause of uncertainty is the delicate balance that each actor strikes between his own costs and benefits and the costs and benefits of the network as a whole. This balance is present in all the major decisions made. It is not for altruistic reasons that an actor refrains from maximizing his own benefits in a particular decision; rather, it is a question of giving priority to a long-term view. The trade-off between different time perspectives is of course part of all major decision processes, whether or not they take place in a network. However in a network these trade-offs possess an added complexity because of the "soft" and uncertain character of some of the longterm values, such as trust, opportunities for future participation in the network, etc. Some of the tenants in the Ring mall provide an illustration of these different perspectives. One of the tenants, an independent small grocery chain, chose to negotiate the tenancy agreement with the mall organizer at an early stage in the process, without pressing for the lowest possible rent. This early agreement facilitated the organizer's design. The grocery chain's line of reasoning was that by becoming known as an attractive partner it could ensure the opportunity to participate in future projects. Its priority was to establish a reputation for being a panner that the organizers would like to invite. Thus, its long-term strategy was to set up in as many attractive malls as possible at the cost of paying a higher rent than necessary. One of the other grocery chains chose a different strategy. This tenant let the negotiations go on for a long time in order to get a lower rent. Long into the bargaining process, this grocery chain chose to say no to the offer. This tenant's strategy was based on the fact that it could afford bad will. Being a well-known and widespread chain, it could be sure of always being asked to participate in any new mall project. B. Many actors attempt to behave rationally One of the major factors that makes for uncertainty in any one actor is the combination of his dependence on other actors in the network and the non-existence of information about the decisions that these other actors will make in the near future. Some of them are regarded as partners in a joint effort, others as rivals. Many actors may be partners with one another in some respects and competitors in others. An illustration of this was the tendency for both tenants and organizer to wait until the end of the construction process before finalizing any agreements about who should rent what space at what price. The tenants wanted to wait so as to get some indication of the value of the area they were to rent. The organizer wanted to reach agreements with the major tenants so he would know what to offer the minor and more easily replaceable tenants. For all actors such strategies led first

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to a period of great uncertainty, followed by an abrupt decision which was generally succeeded by an extremely hectic period of implementation.

C. Difficulties in assessing the long-term value of the decision The actors' independent approach to making decisions is not the only cause of uncertainty. The object itself, i.e., the major societal investment which is the raison d'etre for the network, cannot be evaluated with any certainty. The "real" return does not appear until long after the decisions have been made. This situation is, of course, common to most investments. However, from a societal perspective it is often difficult to measure the return in monetary terms. And no single actor can really control what the end product will be.

THE PSEUDO-HIERARCHY IN THE IMPLEMENTATION PROCESSES There are actors not directly concerned with the political processes in the design phase who are waiting to become involved in the implementation process. These actors want to have clear and consistent indications of what should be done. They usually prefer flexible solutions without too much detailed control from above. The organization for the implementation process may be characterized as a pseudo-hierarchy. This is attributable to one particular factor. As we have seen, one main characteristic of a network is the non-existence of a hierarchical top capable of making final decisions which are binding for the network as a whole. In the implementation phase, the organizer, as client of the builder, has in principle such a final say on most of the cost and design decisions (although he has less control over methods and processes used). We have frequently been amazed by the attitude of project leaders engaged in the implementation of major construction projects. Although the projects are clearly very complex and many actors are involved, the project leaders seem to regard the various processes as "running machines". Their management is "problemistic" rather than problematic (to use a concept introduced by Cyert and March, 1963), i.e., their activities are oriented towards responding to problems, usually to find the simplest and most straightforward solution (Docherty and Stjernberg, 1975). The more proactive elements in their management are concerned with protecting the running machine from external sabotage, and ensuring that the necessary resources - - including such things as financial resources - - are available. Management in the implementation process is concemed with the skillful protection of the process from power-holders with new ideas. Management is concerned with ingenuity in solving concrete practical problems and with flexibility in adapting to changing circumstances without losing sight of the final very concrete task of putting up the mall. How then is this protection achieved? Acting rather than asking seems to be the major principle (Rombach, 1986). Power-holders in the environment are met by strategies quite different from the strategies of less powerful actors (Docherty, 1972). The less powerful actors lack power because they are replaceable in the network, or at least do not threaten implementation. This is, of course, the basis for judging their power. Management thus means concentrating the available resources on relations with the power-holders. Let us give two examples of the exercise of power.

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A. Implementation as exercise of power The project leader's major power resource is control over the implementation process. This means that as long as his position is not threatened he has the ability to influence other powerholders by creating afait accompli. It is more difficult to demolish a house that is already in place than to erase it from a drawing. By acting rather than asking, the leader can avoid political processes that would block implementation. That this strategy may also be quite acceptable to other power-holders can be seen in the Ring mall case. When it came to the design of the interior of the mall, the project leader simply erected some of the walls instead of waiting for the decision of the city's building authorities. The consequence could have been a large fine combined with an order to demolish the walls. However, the actual consequence was a fine of $400, the lowest possible sum and a negligible amount compared with the potential costs of a delay. B. Closing the design processes The strategy adopted by the project leader in the case of the Ring was to act as though the design decisions had already been taken. This was possible because the actors controlling his resources had, in fact, made their decisions. The other actors whose legitimate roles included controlling decisions, i.e., the controllers and the politicians, were faced with having to make some of their decisions about buildings that had already been erected. In general terms, good implementation consists of protecting the implementation process from disturbing political processes in the environment. This can be achieved by acting as though all the decisions have already been taken. But when the implementer is dependent on the willingness of other actors to provide the necessary resources, this strategy is not possible. However, there are ample opportunities for exploiting the irrationality of human behavior to create the necessary decisions. The types of irrationality which we have seen at work in our own cases, or which have been noted in the literature include: a tendency to base decisions on sunk costs rather than future returns; - a tendency to gradually increase commitment rather than to stop to make an assessment; and - searching for confirming information, i.e., information that justifies the decisions taken (or the preferred alternative), rather than searching for information that might throw some doubt on the decisions to be taken. -

These and other weaknesses in human decision processes have been studied by psychologists in laboratory settings (e.g., Tversky and Kahneman, 1973, 1981). It should not surprise us (although it may be a cause of worry) that they appear to be equally valid descriptions of the processes at work in major complex projects.

THE STRATEGIC POSITION IN A PROJECT NETWORK The actor that controls the transformation of the design processes into the implementation process has a unique strategic position in the project network. These two sub-processes of major complex societal investment cannot be totally separated in time (often suggested in management theories, e.g., Ansoff, 1965; Andrews, 1971; Vancil, 1973; Lorange, 1980, 1982), nor can they run as parallel but separated processes (e.g., Brunsson, 1985). They are integrated, yet they require different strategies and managerial skills (Bourgeois, 1980; Quinn, 1980) as they repre-

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sent two different kinds of tasks fulfilled with two different sets of logic and two different types of network structures. The balancing of the design and the implementation processes is the essence of what we like to call "on-line management". The concept of "on-line management" is intended to capture the crucial gatekeeper function (Pettigrew, 1973) between the design processes and the implementation processes. The concept of "on-line management" acknowledges that in the early phases of a project the main problem is to make decisions that can be implemented. In later phases the main problem is to acquire legitimacy for such actions that have to be taken. The crucial power in a network of actors developing and implementing a major investment lies in the hands of the organizations which can control the flows of information between decision and implementation processes. This flow is two-directional. On the one hand, guidance is needed about the actions that should be taken according to the design decisions, i.e., the flow from design to actions. On the other hand, guidance is also required about the decisions that should be made and the design that should be developed in order to facilitate the ongoing chain of actions, i.e., the flow from actions to design. In the case of the Ring mall, we could identify one key actor in particular who could be described as exercising the on-line management role. This was the organizer, who became the owner of the buildings. In this capacity he had a special role in linking the design and implementation activities. The organizer bought the services of the designers and the builders. During the construction of the buildings he continuously led activities, such as the coordination of the design, the discussions about contracts with tenants, contact with the controllers, etc. This meant that implementation, in the form of the physical construction of the mall, was separated from the continuing design activities - - with one actor, the organizer, acting as the link between the two "worlds". However, the organizer did not appear on the scene until some of the main design decisions had already been taken. Is it possible to identify an actor undertaking a similar role in linking design and implementation decisions in the early phases of the process? Although this role is more difficult to identify in the phase when few implementation activities were taking place, we do have one candidate for the role - - the office representing the land ownership role of the city of Stockholm. The land on which the mall has been built is actually owned by the city and let to the organizer. How was the on-line management role exercised by the landowner? The office assumed responsibility for coordinating negotiations among the visionaries, those who owned the buildings that were to be demolished, and those responsible for the parallel activities of designing and constructing a highway running in a tunnel under the shopping mall. What were the common features of the two actors exercising on-line management? They both represented the ownership function (of the land and the buildings, respectively). This legitimized their role as a link between design and implementation. They were deeply involved in contract discussions, and they could sometimes act as a node of a network - - the hub of a wheel in the sense that they both join and keep separate the other actors.

CONCLUDING DISCUSSION We have proposed a framework for describing design and implementation in major investment projects. This characterization of major projects illuminates several shortcomings and raises some doubts about the view of projects advocated in the project management tradition. In this tradition, planning, control and evaluation are emphasized and projects are described in a way that corresponds with the image of organizations as machines (cf. Morgan, 1986), i.e., tools to

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achieve common and well-defined goals. A construction project is a mean to fulfill the erection of a building in a profitable way. The project is clearly defined both spatially and in time. Our point is that, although this is something to strive for in implementation, it is built on an unrealistic view of the design process because of the different network configurations applying to the two types of process. One could say that the framework proposed here is a reaction against the too limited view of treating the project as a rational endeavor suitable for different formal planning techniques (i.e., according to a machine metaphor). Instead, using a network metaphor, a project is seen as processes of organizing among actors with different rationalities in terms of goals, time orientation and problem-solving, and different and changing power positions in the network. From a network perspective, focusing on interaction, the reasons behind projects become more complex. A project is not only a device to fulfill an obvious task (such as erecting a building), but also means for actors which try to gradually reposition themselves in the wider economic environment. The actors have various reasons for participation. They are not motivated only by the project's raison d'etre. There are no common goals in the network in the traditional business sense. Instead there is an array of coexisting, partly supporting and partly conflicting, individual goals. We have identified some of the generic characteristics of design and implementation processes in major investments - - the lack of a hierarchical top able to take decisions for the network as a whole, the division of roles and tasks based on legal requirements as well as on professional specialties, the presence of stakeholders with different bases of power and influence during the stages of the project, and the opportunity to manage by controlling the transition from design processes to implementation. We also identified a different type of structure during the implementation phase, where the network had the character of a "pseudo-hierarchy" because of the position of one of the actors, the organizer, as controller of the economic resources. The implementation was described as though it was a question of running the machine that transforms major decision into actions (including many minor decisions). The different character of the network structure during the implementation phase is the main reason for the physical implementation being seen as much less complicated than the closing of the design phase. These characteristics of projects, described above, are hardly recognized in the project management tradition. Instead the project management tradition has focused on the less problematic phase (the implementation phase) of major projects in the sense that well-defined goals have been assumed to exist as a base for the project. But the major problem in a societal investment process concerns the processes of deciding whether the major investment should take place, how it should be designed, what structure should be set up (i.e., actors and relations), and what processes should be established for decision-making and implementation. To these kinds of questions, the project management tradition has had little to offer. In major projects, the degree of uncertainty is significant. We have illustrated how uncertainty, from a project perspective, is the result of actors attempting to behave rationally in complex interorganizational interdependence, and how powerful actors, especially in the implementation process, can reduce uncertainty through exploiting irrationality. This is in contrast to the usual explanations of project failures in the project management tradition. Usually failures are explained in terms of non-rational decision-making and/or bad planning and control (Janis, 1972; Persson, 1979; Hall, 1980; Segelod, 1986; Morris and Hough, 1987). The network perspective presented here explains problems of the design phase in terms of actors trying to behave in a rational way, and success in the implementation phase in terms of powerful actors not trying to behave in accordance with the rational decision model. From this

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kind of observation, it becomes obvious, as Packendorff (1994) argues, that projects are aggregates of organizations (and individuals), not a number of controllable elements in a work breakdown structure. A focus on projects also may contribute to the general understanding of the functioning of networks. When studying inter-organizational collaboration, the inherent stability in the network tends to be emphasized (H~igg and Johansson, 1988; Harrigan, 1986; Johansson and Mattsson, 1987; Powell, 1987; Borys and Jemison, 1989). But when the focus is on projects accomplished in networks, there is a natural shift in focus towards the dynamic characteristics of networks. Furthermore, major projects may be suitable not only for studying the dynamic dimension, but also for developing our understanding of the balance between competition and collaboration in a network, and between long-term and short-term considerations. Overall, we believe that studies of major projects can contribute to our knowledge about the process of "creative destruction" of economies. In today's society, interdependence has grown to such an extent that organizations are collective units with different types of inter-organizational arrangements to combine strengths and overcome weaknesses (Astley, 1984; Powell, 1987). Organizational investment processes have been studied largely from the perspective of one organization. How to understand (and support with normative models) decision processes in inter-organizational settings is still a challenge for researchers. Is it possible to create a normative theory for decision-making for networks of organizations? Since networks lack the systemic property of a boundary, there might be no logical way of deriving a common set of non-conflicting goals. Maybe there is a lesson and a challenge here for the project management tradition. Acknowledgements - - The authors wish to thank Professor Bengt Stymne, Mr. Jesper Blomberg, Mr. Johan Berglund (Stockholm School of Economics) for comments during the preparation of this article, and Dr. P~iivi Eriksson (University of Tampere), Dr. Stuart MacDonald and Professor Andrew Pettigrew (University of Warwick), and the reviewers for comments on earlier versions of the article. The Swedish Work Environment Fund, the Swedish Council for Building Research and the Swedish Council for Research in Humanities and Social Sciences have provided the financial support for projects within our research program about complex decision processes in networks of organizations.

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APPENDIX Categories of actors - - named according to each actor's principal role in the network.

FORMAL POWER AT SPECIFIC DECISION OPPORTUNITIES The politicians Involved directly as formal decision-makers in several of the boards of the municipality, as well as indirectly as board members in companies controlled by the municipality. Influence based on formal regulations and ownership. Takes part at regulated "decision points" all through the process.

POWER TO STOP DESIGN SOLUTIONS The controllers Actors with formal obligation to check building constructions, occupational health and safety, the environment in which foodstuff is sold, fire safety, etc. Often organizations within the municipality or state. Influence at specific stages in the process, in the form of capacity to stop but not to prescribe designs. The influence is based on formal regulations.

POWER TO IMPLEMENT The landowner The actor (usually a company) that originally owns the land on which the mall is to be placed. Influence is strong until the organizer acquires these rights. It is based on formal rights as owner, or proprietor. May become the organizer in later parts of the process. The organizer The company or companies that builds and rents the shops and the other spaces. Influence is strong in later phases, after having acquired the rights based on being owner, or proprietor.

INFLUENCE AS ADVISERS TO POWER-HOLDERS The visionaries The planners in the municipality that draw up the general plans and zoning regulations. Influence early in the process based on professional competence and on access to the other actors' "ears", especially to the politicians'.

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The designers The architects and other consultants that design the building, electrical systems, constructions, ventilation, etc. Influence in the design and implementation phases based on professsional competence and time to sell to primarily the organizer. The constructors The main constructor and subcontractors that do the physical implementation. Influence is based on the competence to advise (or manipulate) the organizer and the other actors.

POWER BASED ON ATTRACTIVENESS TO THE CUSTOMERS

The tenants The shops and other organizations such as post office, medical-care institutions, etc., that will be tenants in the center. Influence in late stages, usually within very specific boundaries in terms of area and design options. Influence is based on the market conditions, i.e. the tenants attractiveness as magnet, the total area rented, etc.

LITTLE INFLUENCE - - IF ANY

The employees The users of the facilities being built. Little influence on the design of the common spaces of the center (in spite of formal regulations "guaranteeing" such influence for the union representatives), but some influence in some of the shops on the internal design. Take part late in the process - - if at all. The professional representatives Participate in the role as representatives of others. Includes lawyers, union representatives and others. Influence is determined by professional competence and the inviting actor's influence. The customers (not part of the network) These are the ultimate rationale for the process. No influence directly but heavy influence as the focus of many of the other actors' fantasies.