That is not how we brought you up: how is the strategy of a project formed?

Abstract

PurposeThe requirements of various participants of a project may conflict with the strategy of the project's parent organization and, consequently, the project may form its individual strategy independently, to better align with the factors in its environment. The purpose of this paper is to describe the formation of the strategy of a project as a response to the project's environment, providing insight into a project's strategy formation, where the project does not merely reflect the strategy of the parent but where the parent is only one influential actor (of many) in the project's environment.Design/methodology/approachTo increase understanding of the relationship between the project's environment, the strategy of the project‐based firm and the strategy formation of a project, the authors analyze a project of a metallurgy firm in an empirical case study. The authors use project literature and corporate venturing literature, look for the dimensions of project strategy and the factors in the project's environment and study how the factors in the environment shape the project's strategy.FindingsThe analysis suggests that factors in the internal and external environments affect the strategy formation with varying strength. The strategy of the case project was formed in micro‐level iterative processes, in interaction between dimensions of strategy of the project and factors in environment. The empirical case study suggests that a project initiated with strong influence of external factors has to face contradiction between the strategy and related influential factors in the parent organization of the project.Originality/valueThis paper contributes to our understanding of how the strategy of an individual project is formed through micro‐level processes that are related to external and internal factors that affect the strategy formation.